Canada-based licensed cannabis producer Organigram Holdings has acquired all the issued and outstanding shares of Motif Labs (Motif) for an upfront consideration of $90m.
The upfront payment includes $50m cash, and Organigram common shares worth $40m, based on the 30-day trading VWAP on the Toronto Stock Exchange (TSX).
In addition, Motif shareholders are eligible to receive an additional contingent consideration of $10m, payable in Organigram common shares.
The contingent consideration is subject to Organigram achieving more than $3.2203 per share, based on the rolling 30-trading day VWAP on the TSX, within 12 months.
Organigram CEO Beena Goldenberg said: “The highly complementary acquisition of Motif establishes Organigram as Canada’s largest cannabis company by market share and accelerates our vision to be a leading cannabis company across all major categories, driven by a relentless focus on the consumer of today and tomorrow.
“Winning in Canada, the world’s largest federally legal recreational market, supported by leading brands and best-in-class operations, innovation and product development, provides the platform to unlock global opportunities as evolving attitudes towards cannabis drive regulatory changes in new and exciting markets.”
Motif is a major player in the vape and infused pre-roll (IPR) categories, backed by a portfolio of strong, owned brands, including the popular BOXHOT brand.
Based in Aylmer, Ontario, it is strategically located in the centre of Southwestern Ontario, with plans to be supported by a large distribution warehouse in nearby London, Ontario.
The company designs, develops and launches high-quality products at speed and scale, and its business also includes a wholesale division and end-to-end services for external brands.
Motif CEO and founder Mario Naric said: “Motif was founded in 2017 with a vision to leverage manufacturing expertise to succeed in the production of cannabis extracts.
“We are proud to say that today, not only is Motif one of Canada’s largest and most efficient extractors but we have also commercialised a portfolio of leading, widely distributed brands that have unlocked leading market share positions of #1 in vapes and #3 in infused pre-rolls.
“This is a landmark transaction in our industry and the Motif team is thrilled to be joining forces with Organigram to create Canada’s undisputed leader with deep capabilities in all major cannabis categories.”
BMO Capital Markets served as an exclusive financial advisor, and Borden Ladner Gervais as its legal counsel to Organigram, on the transaction.
Jefferies served as exclusive financial advisor, and Davies Ward Phillips & Vineberg as legal counsel to Motif, while MLT Aikins worked on specified regulatory matters for both parties.
Organigram chief strategy officer Paolo De Luca said: “Organigram has a proven track record of executing on Canadian M&A, successfully capturing and growing market share with highly complementary acquisitions that add to our existing strengths.
“This acquisition of Motif is no exception. This deal is about a leading public cannabis company joining forces with Canada’s top private licensed producer.
“We are extremely excited about leveraging our combined competitive advantages and respective market positions to continue to grow in Canada and beyond.”
