Aurora Cannabis Acquires MedReleaf Australia
NASDAQ | TSX: ACB
- Aurora becomes the largest global medical cannabis company operating in nationally legal markets.
- MedReleaf Australia holds the #2 position in medical cannabis within the rapidly growing ~AUD$400 million1 Australian market.
- Transaction is expected to be immediately accretive to Adjusted EBITDA2 and accelerate the Company's plan for Positive Free Cash Flow2 generation in calendar 2024.
MedReleaf Australia is a leading distributor of medical cannabisproducts and holds the #2 position in the Australian medical cannabis market. This market is currently estimated to be worth approximately AUD$400 million1 and has quickly become one of the largest nationally legal global medical cannabis markets outside of
The medical cannabis market in
1 |
"The acquisition of MedReleaf Australia represents a strategic milestone in Aurora's global cannabis leadership, demonstrating our commitment to investing in markets that offer opportunities for sustainable and profitable growth, said
"We're proud to have built one of
-
Supports Aurora's Global Cannabis Leadership
: Strengthens Aurora's presence in
Australia , a region experiencing significant growth in medical cannabis adoption, which further solidifies its position as a leading global cannabis company. - Leverages Aurora's Strength in Providing Pharmaceutical Grade Cannabis : The Australian model is medical focused and clinician-led, consistent with other markets where Aurora has achieved success. The acquisition demonstrates the Company's deliberate approach to pursuing market growth that more closely mirrors typical pharmaceutical industries.
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Expands Margins of Australian Business Model
: The Transaction is expected to improve Revenue contributions and Gross Margins to further align our Australian business with our other key profitable international markets, most notably
Germany ,Poland and theUnited Kingdom . -
Supports Aurora's Path to Profitability:
MedReleaf Australia generated trailing 12-month net revenue of ~AUD$40million (as of
December 31, 2023 ) and was adjusted EBITDA2 and operating cash flow positive. We expect this Transaction to be immediately accretive and will support and accelerate Aurora's plan to achieve positive free cashflow in calendar 2024.
Aurora, through its wholly owned subsidiary, purchased the remaining approximately 90% equity interest of MedReleaf Australia at a total enterprise value of AUD$50 million subject to customary adjustments. As consideration, Aurora (i) issued the selling shareholders an aggregate of approximately 69.5 million
Aurora is opening the world to cannabis, serving both the medical and consumer markets. Headquartered in
Aurora's common shares trade on the Nasdaq and TSX under the symbol "ACB" and is a constituent of the S&P/TSX Composite Index.
This news release includes statements containing certain "forward-looking information" within the meaning of applicable securities law ("forward-looking statements"). Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements made in this news release include statements regarding the Transaction, including, but not limited to: the impact of the Transaction on the Company's financial performance and the synergies, revenue, positive cash flow and positive Adjusted EBITDA2 expected to be realized as a result of the Transaction.
These forward-looking statements are only predictions. Forward looking information or statements contained in this news release have been developed based on assumptions management considers to be reasonable. Material factors or assumptions involved in developing forward-looking statements include, without limitation, publicly available information from governmental sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which the Company believes to be reasonable. Forward-looking statements are subject to a variety of risks, uncertainties and other factors that management believes to be relevant and reasonable in the circumstances could cause actual events, results, level of activity, performance, prospects, opportunities or achievements to differ materially from those projected in the forward-looking statements. These risks include, but are not limited to, the ability to retain key personnel, the ability to continue investing in infrastructure to support growth, the ability to obtain financing on acceptable terms, the continued quality of our products, customer experience and retention, the development of third party government and non-government consumer sales channels, management's estimates of consumer demand in
This news release contains reference to certain financial performance measures that are not recognized or defined under IFRS (termed "Non-GAAP Measures"). As a result, this data may not be comparable to data presented by other licensed producers of cannabis and cannabis companies. Non-GAAP Measures in this news release include, but are not limited to, "Adjusted EBITDA" and "Free Cash Flow". Non-GAAP Measures should be considered together with other data prepared in accordance with IFRS to enable investors to evaluate the Company's operating results, underlying performance and prospects in a manner similar to Aurora's management. Accordingly, these non-GAAP Measures are intended to provide additional information and to assist management and investors in assessing financial performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The information included under the heading "Cautionary Statement Regarding Certain Non-GAAP Performance Measures" in the Company's management's discussion and analysis for the three and nine months ended
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