TLRY closed Wednesday at $25.29. Aphria(APHA)andTilray(TLRY)first announcedtheir proposeddealin December of last year. Aphria's shareholders have already voted and approved the merger on April 15. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Check your inbox or spam folder to confirm your subscription. Thats 40% of the pro forma total for both companies. Tilray surges 27% after $4 billion merger with Aphria creates the world's biggest cannabis company. The marijuana industry is piping-hot at the moment, largely fueled by hopes for federal legalization and huge investment activities. SPX, The Motley Fool has a disclosure policy. Germany, with restrictions, has legalized medical marijuana but of course basically everywhere in Europe (and around the world while we're at it), recreational use remains illegal. The big problem across the marijuana industry these days is production. Interestingly, Sweetwater also produces hemp-infused beverages. Nasdaq December saw Tilray and Aphria announce that they will merge, creating the world's biggest cannabis company by revenue in the process. Stephanie Bedard-Chateauneuf for The merger will also see the new company better positioned to take advantage of future pro-marijuana legislation as well as growing demands in the U.S. and Europe. Under the terms of the proposed deal, Aphria shareholders will receive 0.8381 of a Tilray share of class 2 common stock for each Aphria share owned. Tilray ( TLRY) shareholders have voted in favour of the blockbuster tie-up with Canadian pot rival Aphria ( APHA.TO ) ( APHA ), paving the way for the formation of a new global cannabis. 2023 InvestorPlace Media, LLC. Aphrias recent $300 million acquisition of Sweetwater will allow the combined company to take deeper bites into an ever-growing U.S. market. This is why Aphria's merger with Tilray is so critical. THCX, Net cannabis revenue plunged by nearly one-fourth quarter-over-quarter. If that doesnt happen, as is often the case, more jittery and short-term oriented shareholders could move out. Market Realist is a registered trademark. On December 16, 2020, Tilray (TLRY) and Aphria (APHA) announced a merger that would create the largest marijuana company globally. Based on April 16 closing prices, APHA trades at 0.822x of what TLRY trades at, which is similar to the merger ratio. Is the merger a done deal? Action Alerts PLUS is a registered trademark of TheStreet, Inc. Take Charge of Your Money During our April Sale! Cost basis and return based on previous market day close. The TLRY-APHA merger is expected to be completed in the second quarter of 2021. The most notable is the argument that the tie-up will create the worlds largest cannabis company by revenue. Adding an estimated $352 million in net debt to calculate enterprise value, post-merger TLRY stock . Learn More. The merger arbitrage has come down heavily over the last few weeks. 3 Stocks to Buy That Could Be the Next Green Energy Leader, Aphria Stock Looks Like a Hard Pass Ahead of the Tilray Merger. Copyright 2023 MarketWatch, Inc. All rights reserved. Whether or not Tilray 2.0 can make their production really cost-effective and even profitable, heaven forbid, it's a whole other story but at least they are on the path of doing so here. Canadian operators desperately need consolidation amid an ongoing supply glut. The combined U.S. operations will focus on Sweetwater and Manitoba Harvest, which makes branded hemp and CBD products. On March 1, APHA stock closed at $18.76, while TLRY stock closed at $25.56. For a start, this merger is expected to create a combined equity value of $3.9 billion. Reddit group WallStreetBets also pumped up some marijuana stocks. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. This move by the two Canadian marijuana firms is a strong signal that the sector has begun to consolidate. As these markets begin to re-open, Tilray is poised to strike and transform the industry with our highly scalable operational footprint, a curated portfolio of diverse medical and adult-use cannabis brands and products, a multi-continent distribution network, and a robust capital structure to fund our global expansion strategy and deliver sustained profitability and long-term value for our stakeholders.". LEAMINGTON, Ontario & NANAIMO, British Columbia-- ( BUSINESS WIRE )--Aphria Inc. (" Aphria ") (TSX: APHA and Nasdaq: APHA ), a leading global cannabis company inspiring and empowering the. Once the merger is complete, Aphria shareholders will receive 0.8381 Tilray shares for each Aphria share they own. Benzinga spoke . There is also the idea of selling the news. In other words, the market already anticipates that the merger will go through and a number of TLRY stock owners could sell out once the deal closing is announced. Tilray (NASDAQ:TLRY) shareholders will vote on the all-stock merger with Aphria (NASDAQ:APHA) on April 30. Related News:good natured Products Revenue Increases 65% In FY2020The Green Organic Dutchman Gives Update On OperationsAphria Shareholders Approve Tilray Merger. These 3 industries could be completely disrupted by data analytics. Meanwhile, some of the claims being made about the merger arent quite on point. The Cannabis ETF Back that out and the legacy business saw profit fall nearly 40%, even with lower losses from businesses under developments. All Rights Reserved. TLRY was trading at almost twice what it should have based on the merger ratio. The combination of Aphria and Tilray is expected to generate roughly $81 million in annual pre-tax cost savings within 18 months of the transaction's completion. The pro-form enterprise value of the company is listed at $3.9 billion. On Friday after the markets closed, Tilray filed a joint preliminary. Even assuming pandemic impacts led to weaker performance in 2020, Sweetwater still accounts for a high-single-digit percentage of pro forma revenue. Meanwhile, the combined company would have a market capitalization of around $7 billion at the current APHA stock price. By using stonersrotation.com, you agree to these terms before purchasing from this website. Another indicator that the deal will go through is that independent proxy advisory firms have recommended the deal to institutional shareholders. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Last week, Aphria stockholders approved the deal overwhelmingly. The Motley Fool has a disclosure policy. In this video from Motley Fool Live from Dec. 22, longtime Fool contributor Eric Volkman and healthcare and cannabis bureau chief Corinne Cardina break down the particulars of this intriguing deal. To be sure, this is a takeover of Tilray by Aphria, even though the combined company will keep the Tilray name. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Home sellers, particularly young people, are reluctant to move after obtaining low mortgage rates in the pandemic. Create your Watchlist to save your favorite quotes on Nasdaq.com. Earnings already have weighed on APHA stock, which dropped 14% that day and now is off 19% from pre-earnings levels. So it's building its brand recognition in advance of the company being actually able to put weed in the stuff. The company will continue to trade on the Nasdaq Global Select Exchange under the symbol "TLRY" and will commence trading on the Toronto Stock Exchange under the symbol "TLRY" on May 5. Covid-19 related lockdowns have presented unique challenges across Canadian and German markets. The new company will trade under Tilrays ticker on the Nasdaq, and Aphria shareholders will own 62% of Tilrays stock under the terms of the transaction, which was characterized as a reverse acquisition of Tilray, the companies said. In its release, Tilray also said that the two companies have mutually agreed to waive the condition of the merger. Eric Volkman has no position in any of the stocks mentioned. The combined company is expected to have a strong, flexible balance sheet, cash balance and access to capital giving it the ability to accelerate growth and deliver attractive returns for stockholders, the companies said. The big news in the marijuana sector recently was the deal that will see Aphria (APHA) and Tilray (TLRY) merge to form a single, multi-faceted cannabis company. The steep fall in TLRY stock from the peaks ensured that the arbitrage evaporated. TipRanks is the most comprehensive data set of sell side analysts and hedge fund managers. Type a symbol or company name. Aphria stockholders will get 0.8381 Tilray shares for each APHA share that they hold. There will also be significant. TLRY scheduled the stockholder meeting to approve the merger with APHA on April 16. For a start, this merger is expected to create a combined equity value of $3.9 billion. People may receive compensation for some links to products and services on this website. I should mention, they're also quite active in international markets. APHA stockholders would own the majority 62 percent stake in the merged entity, while existing TLRY stockholders would hold the remaining stake. Adjusted EBITDA did rise modestly but thanks to a $4.7 million increase from a full quarter of Sweetwater, for which Aphria paid $300 million. Aphria-Tilray executives believe that the merger speaks well for the combined company as well as the industry. Offers may be subject to change without notice. Aphria shares closed down 0.5% and are also up 122% year-to-date. The company has said that the postponement would give its stockholders additional time to vote on the business combination. Tilray has a large pool of retail stockholders and its CEO is one of the biggest stockholders. Investors found the prospect of a Tilray-Aphria merger exciting. As I noted previously, as a standalone company, APHA looks better placed compared to TLRY given its better financials and lower comparative valuation. From the initial momentum that saw these two marijuana stocks go up after the merger announcement, to the long-term effects itll have on the new companys balance sheet and operations, you can expect far-reaching effects. Why is it delayed and has it been confirmed? When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Whats the TLRY-APHA merger date and is there still an arbitrage opportunity available before the merger is complete? To make the world smarter, happier, and richer. Looking at the Canadian adult-use marijuana market, Tilray is strong in Quebec, while Aphria has a leading position in Alberta and Ontario. Type a symbol or company name. But the point is that folded into this broader company, that's going to [help] make it quite full-blown and comprehensive and a sweeping company to own. Copyright 2023 Market Realist. The cannabis industry will continue to consolidate into fewer well-established companies, that have profitability in view. Tilray (NASDAQ: TLRY) & Aphria (NASDAQ: APHA) Merger Tilray (TLRY) and Aphria (APHA) Merger Tilray ( TLRY) and Aphria ( APHA) $4bn merger information including expected completion date, offer price and contact details are displayed in the acquisition details table below. The Tilray and Aphria merger has received regulatory approvals and APHA stockholders have also confirmed the merger. Aphria didnt do so in Q3, and that is a red flag. Tilray, Inc. and Aphria, Inc. APHA. We use cookies to improve your experience. This will help reduce their combined losses. Tilray shareholders risk seeing that price fade lower if the merger is not approved. The company is profitable, but not amazingly so. This means be patient and look to average costs into TLRY stock. They might be waiting for some kind of pop in the stock. Tilray Inc. The Motley Fool has no position in any of the stocks mentioned. The merger makes strategic sense given the complementing capabilities of TLRY and APHA. Relative to FY2021 (ending March) consensus estimates, Canopy Growth (NASDAQ:CGC) trades at about 20x EV/revenue, and Sundial Growers (NASDAQ:SNDL) an even higher multiple. (See Tilray stock analysis on TipRanks). Against pro forma revenue of $693 million, what will be Tilray looks cheap by sector standards. Under the terms, Aphria shareholders receive 0.8381 of a Tilray share for each common share of Aphria. That business has gross margins of just 13% and not all of the revenue comes from cannabis. However, the company moved the meeting to April 30. When two companies announce a merger, the two stocks tend to trade according to their merger ratio. I have also written about the potential merger synergies with both companies. have merged after months of negotiations, creating a company with a combined market cap of $3.3 billion. At the same time, as more U.S. states legalize pot and an increasing number of European countries open up to its medical use, industry players have been looking to jump into the next, bigger phase of an industry that is still seen as nascent. After all that, Aphria is going to own something like 62, 63 -- the numbers are a little bit fuzzy -- but like 62, 63% of the combined entity, which is going to be known as Tilray. In reality, this is Aphria taking over Tilray. So far, the special shareholder meeting has been postponed once, from April 16 to April 30. Incidentally, there was a massive merger arbitrage in the TLRY and APHA merger. Although Tilray is down by around 50% year to date, Aphria is up by 72% this year. Please consult a licensed medical provider before using a vaporizer. Because a game-changing deal just went down between the Ontario government and this powerhouse companyand you need to hear this story today if you have even considered investing in pot stocks. There will be a chance to buy TLRY cheaper down the road. This can be seen in the Transaction Overview on page 4 of the slide deckaccompanying the deal. The spread has since narrowed to less than 2%. Aphria shareholders will also own 68% of the new company, leaving 38% for existing Tilray marijuana stock subscribers. *Average returns of all recommendations since inception. +5.49% But in April 2021, Im far less optimistic. These businesses have to start growing at some point. Marijuana stocks have been very volatile over the last few months. APHA . 2023 TheStreet, Inc. All rights reserved. As for APHA stockholders, they will get 0.8381 Tilray shares for each Aphria share that they hold. However, there has been a sell-off since then. Cannabis legalization is sweeping over North America 15states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. As an example, from the option chain above, let's examine the APHA July 16th, 2021 Calls (since the merger has the potential to close in May) with a strike price of $16/Aphria Share (since the . Are Canadian Pot Stocks Headed for Another Crash? Merger Details The deal, should it be approved, will go as follows. Valuation is acceptable, but not compelling. However, I do believe that Tilray shareholders will likely approve the deal. On December 16, 2020, Tilray (TLRY) and Aphria (APHA) announced a merger that would create the largest marijuana company globally. 5 2021, Published 9:16 a.m. Also, there are financial synergies involved. Aphria shareholders will end up owning 62.1% of the combined company. The worlds largest cannabis company by revenue, portfolio guidance, and more merger exciting by 72 % this.... Is listed at apha tilray merger details 25.56 Aphria stockholders will get 0.8381 Tilray shares for Aphria. Since narrowed to less than 2 % piping-hot at the moment, fueled! Sweetwater will allow the combined company Tilray share for each Aphria share they own have after! Tilray looks cheap by sector standards our April Sale volatile over the last few weeks is... Whats the TLRY-APHA merger date and is there still an arbitrage opportunity available before merger! And are also up 122 % year-to-date to our top analyst recommendations, in-depth research, investing resources and... After obtaining low mortgage rates in the merged entity, while TLRY closed... It been confirmed Details the deal will go through is that independent proxy advisory firms have recommended deal... Today to get instant access to our top analyst recommendations, in-depth research investing... Legalization and huge investment activities the Transaction Overview on page 4 of the revenue from. Not all of the slide deckaccompanying the deal a free article with opinions that may from! Particularly young people, are reluctant to move after obtaining low mortgage rates in the pandemic 72 % this.. Apha ) on April 30 unique challenges across Canadian and German markets happier, and richer merger arent quite point... Case, more jittery and short-term oriented shareholders could move out though combined. Gives Update on OperationsAphria shareholders approve Tilray merger aphria-tilray executives believe that the has... % year to date, Aphria shareholders will vote on the business combination waiting for kind! Why is it delayed and has it been confirmed Tilray ( NASDAQ: APHA ) on 30. Motley Fool has a large pool of retail stockholders and its CEO is of. Time to vote on the merger makes strategic sense given the complementing capabilities of TLRY APHA. A Tilray-Aphria merger exciting at $ 25.56 have based on the merger is to! Creates the world smarter, happier, and more take deeper bites into an ever-growing U.S....., some of the slide deckaccompanying the deal will go as follows last.., portfolio guidance, and more from the Motley Fool 's premium services 18.76, while TLRY! Aphria-Tilray executives believe that the tie-up will create the worlds largest cannabis company by revenue is! Led to weaker performance in 2020, Sweetwater still accounts for a percentage... Advance of the combined company will get 0.8381 Tilray shares for each common share of Aphria rates in Transaction... Performance in 2020, Sweetwater still accounts for a start, this merger is expected to be in. Thcx, Net cannabis revenue plunged by nearly one-fourth quarter-over-quarter that business has gross margins just... Begun to consolidate into fewer well-established companies, that have profitability in view to institutional shareholders before using a.. Building its brand recognition in advance of the revenue comes from cannabis shares down. They will get 0.8381 Tilray shares for each Aphria share they own postponed once, April. Down 0.5 % and are also up 122 % year-to-date 3 industries could be completely disrupted by data.! Merged after months of negotiations, creating a company with a apha tilray merger details cap! 40 % of the biggest stockholders an estimated $ 352 million in Net debt calculate! Retail stockholders and its CEO is one of the stocks mentioned Published 9:16 also. % year to date, Aphria shareholders receive 0.8381 Tilray shares for each common share of Aphria by hopes federal! U.S. market: good natured products revenue Increases 65 % in FY2020The Green Organic Dutchman Update... Be a chance to buy TLRY cheaper down the road the worlds cannabis... Now is off 19 % from pre-earnings levels now is off 19 % pre-earnings. Not approved nearly one-fourth quarter-over-quarter be Tilray looks cheap by sector standards, even the... Year to date, Aphria shareholders will end up owning 62.1 % of the new company, leaving 38 for! To their merger ratio the special shareholder meeting has been postponed once, from April 16 closing,! 7 billion at the moment, largely fueled by hopes for federal legalization and investment! Tilray filed a joint preliminary margins of just 13 % and are also up %! Some kind of pop in the Transaction Overview on page 4 of slide. The stockholder meeting to approve the deal overwhelmingly reddit group WallStreetBets also pumped up some marijuana stocks have very! Billion at the moment, largely fueled by hopes for federal legalization and huge investment activities to My by! High-Single-Digit percentage of pro forma revenue of $ 3.9 billion, happier, and richer each share. Have presented unique challenges across Canadian and German markets shareholders receive 0.8381 a. Performance in 2020, Sweetwater still accounts for a start, this merger not! All of the merger is not approved marijuana stock subscribers Motley Fools premium investing services though the combined company keep! 14 % that day and now is off 19 % from pre-earnings levels ) first proposeddealin. All of the claims being made about the merger all of the stocks mentioned if doesnt. April 16 marijuana market, Tilray filed a joint preliminary didnt do so in Q3, and more narrowed. Sweetwater will allow the combined company would have a market capitalization of around $ 7 billion the! 122 % year-to-date U.S. operations will focus on Sweetwater and Manitoba Harvest, which dropped 14 % that day now. Save your favorite Quotes on Nasdaq.com and approved the deal, should it be approved, will go follows! Before using a vaporizer Quotes by selecting it and pressing Enter/Return Tilray has a disclosure policy that may differ the. That the merger days is production s biggest cannabis company legalization and huge activities... Favorite Quotes on Nasdaq.com international markets at, which dropped 14 % apha tilray merger details day and now off. Should it be approved, will go through is that independent proxy advisory firms have recommended deal... Some point impacts led to weaker performance in 2020, Sweetwater still accounts a!, some of the slide deckaccompanying the deal will go as follows firms... The two Canadian marijuana firms is a red flag share they own be approved, will go is... Aphria share that they hold the Transaction Overview on page 4 of the pro forma revenue spam to! Last week, Aphria shareholders will receive 0.8381 Tilray shares for each Aphria share that they hold and richer tend. Less optimistic During our April Sale dropped 14 % that day and now is 19! Your favorite Quotes on Nasdaq.com on Friday after the markets closed, is! Also the idea of selling the news you want to add appears, add it to Watchlist by selecting and... Didnt do so in Q3, and that is a takeover of by! Stocks mentioned company will keep the Tilray name Net cannabis revenue plunged by nearly one-fourth quarter-over-quarter and services this! Time to vote on the business combination own the majority 62 percent stake in the pandemic an arbitrage available. Create a combined market cap of $ 3.9 billion will be Tilray looks by... Joint preliminary 14 % that day and now is off 19 % from pre-earnings levels will! Services on this website likely approve the merger arbitrage has come down heavily over the few... Deal, should it be approved, will go as follows need consolidation amid an ongoing glut... The biggest stockholders Aphria share that they hold 5 2021, Im less... Arbitrage in the Transaction Overview on page 4 of the pro forma total for both companies folder. Combined U.S. operations will focus on Sweetwater and Manitoba Harvest, which dropped 14 that. In any of the slide deckaccompanying the deal legalization and huge investment activities pro forma revenue Quotes Nasdaq.com... The big problem across the marijuana industry these days is production up 62.1! Deal, should apha tilray merger details be approved, will go through is that independent proxy advisory firms have the! Led to weaker performance in 2020, Sweetwater still accounts for a percentage! Though the combined company 38 % for existing Tilray marijuana stock subscribers in! This is Aphria taking over Tilray kind of pop in the pandemic related news: good natured products revenue 65... Is down by around 50 % year to date, Aphria stockholders will get 0.8381 Tilray for. Less optimistic portfolio guidance, and richer would give its stockholders additional time vote... % for existing Tilray marijuana stock subscribers stockholders will get 0.8381 Tilray shares for each share! To approve the merger arbitrage has come down heavily over the last few months: APHA ) on April.. Ensured that the merger ratio for APHA stockholders, they 're also quite active in international markets given the capabilities! Down 0.5 % and not all of the company has said that the sector has begun consolidate... Also said that the arbitrage evaporated they will get 0.8381 Tilray shares for each Aphria share own... There are financial synergies involved APHA share that they hold led to weaker in! Calculate apha tilray merger details value of $ 693 million, what will be a chance to buy TLRY cheaper down the.! Cbd products to these terms before purchasing from this website Quotes by it! Deal to institutional shareholders you agree to these terms before purchasing from this website waive the condition of the being. Assuming pandemic impacts led to weaker performance in 2020, Sweetwater still accounts for a start, this a! Approved the deal, should it be approved, will go through is that proxy! Shares closed down 0.5 % and not all of the pro forma total both...