- Welcome to early expressions of interest from an increasing number of frustrated Aphria shareholders who want a way out of a failed investment.
- Offers valued at C $ 11.00 per Aphria share represent significant and convincing premiums of 45.5% above Aphria's closing price on the Toronto Stock Exchange ("TSX") on December 24, 2018 and 46.0 % over Aphria's volume-weighted average price of TSX for the last 10 trading days ending December 24, 2018
- The Aphria shareholders will maintain control of the pro forma unit, with 60% ownership
COLUMBUS, Ohio, December 31
Since we announced our intention to launch the acquisition of Aphria, we've seen t o Firstly, the Aphria shareholders accept a 45% + premium offer because they understand the significant value that can be solved by our combined teams, assets, and geographic countries. Second, a real interest in the market to understand green growth and appreciation.
Peter Horvath, CEO of Green Growth
When investors are considering our subsequent income, recent license in Nevada and an expansion in the new market for Massachusetts are winning that it is not a question of Green Growth reaching C $ 7.00 per share, but when. We understand that there are some in the market that will focus on destroying the value of Aphria, but we are committed to creating it.
Why Green Growth and Aphria Are The Right Fight
By buying Aphria, green growth represents a way for aphria shareholders to participate in the much larger US market, with significantly greater long-term sales potential. The combination of the two companies will create an outstanding North American player with operations on both sides of the border, combining Aphria's Canadian supply and wholesale agreements with Green Growth's vertically integrated operations, including cultivation, production and retail. The combination is also married to the talent of Aphria's greenhouse industry veterans and pharmaceutical operations with the Green Growth's team of retail experts from renowned retailers, including Designer Shoe Warehouse Inc. and L Brands Inc. (Victoria's Secret). Together, the combined company will become the largest US operator in market capitalization and the only North American cannabis operator.
Green growth record of success and why a $ 7.00 fall in value makes sense
Green growth has a strong success story, making for months what has taken other cannabis companies to achieve. Green growth has a current diluted 1 market value of over $ 1.1 billion.
Management believes that the additional value acquisition from recent announcements and near-term business ventures expected to be completed in a short period of time has not been reflected in the share price and has confidence at least $ 7.00 per share valuation for the following reasons:
- Green Growth has increased more than NOK 150 million in capital since its inception, and by the end of 2018 it was announced through a reverse acquisition. Today, Green Growth owns and operates two premier store stores under the banner "The + Source" 2, as well as a cultivation and treatment facility, all located in Las Vegas, Nevada. The cultivation and processing plant comprises 12,000 square meters and has a potential annual capacity of ~ 1600 kg. In addition, green growth, subject to regulatory approval, has an irrevocable purchase agreement to purchase a growing plant in Pahrump, Nevada. The Pahrump plant will produce product in the near future.
- Green growth was recently awarded another seven retail licenses in Nevada for retail, which, together with current operations and the Pahrump plant, are expected to generate a total turnover of ~ C
- Green Growth has recently announced the acquisition of Just Healthy LLC, which has preliminary registration certificates for a registered medical marijuana dispenser in Northampton, Massachusetts, and a cultivation and treatment site, also located in Northampton. The license provides up to three total medical dispensers. Just Healthy LLC is expected to generate an incremental $ 130 million in revenue by 2020.
- Green Growth has a comprehensive pipeline of value-added and strategic partnerships, including working with six major developers representing a large US shopping mall network. , to start over 450 mall kiosks in prime locations. To illustrate confidence in the value of the C $ 7.00 consideration under the Offer, Green Growth expects to complete a co-funded funding of C $ 300 million at the same price per share, with Green Growth incidents committing to stopping the entire funding .  At a value of $ 7.00 per share, Green Growth would have a total value of $ 1.6 billion in total. Based solely on Green Growth's current Nevada operations, the Pahrump plant and Just Healthy LLC, Green Growth will trade on an implicit 12x TEV / 2020E EBITDA, which is a discount of over 50% to today's large cannabis peer multiples. Furthermore, invoicing in value creation from its near-term business initiatives is expected to be implemented shortly (including shopping mall, e-commerce and wholesale), and trading will be significantly below 12x TEV / 2020E EBITDA.
Aphria shareholders will continue to maintain control over the pro forma unit, with ~ 60% ownership. Green Growth shareholders will have a 34% stake, with subscribers funding $ 300 million, which owns a 6% stake.
Green growth is not related to Aphria
We know, Aphria does not own any shares of green growth, nor do any of Aphria's board members sit on Green Growth's board. As those who participate in the small but growing cannabis industry know, there are many overlapping informal relationships between participants. Any informal relationships that may exist are separate from Green Growth's business decisions, and Green Growth has no related influence with Aphria, and Aphria also has no related influence on green growth.
For further clarity, Aphria's CEO, Vic Neufeld, has been listed as one of many Green Acre Capital advisors through his Green Acre Opportunity Corp. Funds have no influence on Green Growth. Green Acre has invested in several cannabis units, and many are considered competitors to Aphria. There is nothing remarkable about Green Acre investing in another up-to-date cannabis unit, regardless of overlap in a small emerging industry.
The clearest evidence that Green Growth has no influence on Aphria is the fact that Aphria's board refused to engage and reject Green Growth's premium offerings, thus making a transaction much more difficult and expensive to achieve.
Error information from self-interested market participants does not change the benefits of the Premium offer
Certain market participants have spread misinformation related to green growth with a view to destroying the value of Aphria. This error information was generated by comments from those with a pronounced short position in Aphria and whose trading will be hampered by Green Growth's premium offer. Shareholders should be aware of facts related to a number of erroneous statements. In particular:
- Green growth has confirmed that the Schottenstein family does not own shares in Aphria. Schottensteins applied for cultivation, treatment and dispensation license with an affiliated Aphria, Liberty Health Sciences, in the state of Ohio. The venture was awarded a temporary treatment and dispensing license in Ohio. At the time the state law allows transfers, the JV will be dissolved. Having made the application in Ohio, Aphria sold its interest in Liberty Health Sciences.
- Shawn Dym is not the director of Green Growth's Board.
Green Growth Will Start its Offer for Aphria
Green Growth has been willing to work with Aphria's board to find ways to increase the value of shareholders in both companies. Green growth is sure of the security of a C $ 7.00 per share financing. Over 10% of Aphria's shareholders have already indicated their support for the Offer. Aphria's Board has two options: Engage with green growth as a serious buyer to create real value or continue its endless analysis that will lead to the destruction of shareholder value.
We look forward to continued direct engagement with Aphria shareholders while we work together to build the leading cannabis company in the world.
Questions? Need more help? The Aphria shareholders should contact Kingsdale Advisors, the Information Agent and the Offer Depositary at 1-866-851-3214 (North American Free Number) or + 1-416-867-2272 (outside North America) or via contactus email @ kingsdaleadvisors.com.
Assumption to make an offer
Full details of the Offer are expected to be stated in the formal Offer and Acquisition Offer which is expected to be sent to Aphria shareholders, a copy which is expected to be available at www.sedar. com under Aphria's profile. Green Growth expects to formally commence the Offer and send the offer and takeover offer circular to the Aphria shareholders in the coming weeks.
Readers are warned that green growth may decide not to make the Offer if (i) Aphria implements or attempts to implement defensive tactics in relation to the Offer, (ii) Green Growth discloses or discloses or otherwise identifies information about its sources of funding. suggesting that Aphria & # 39; s business, affairs, prospects or assets have been impaired or uncovered or otherwise identify others not disclosed material unwanted information about Aphria or (iii) Aphria decides to engage in green growth to negotiate the terms of a combination transaction, and Aphria and Green Growth decide to carry out this transaction using a structure other than a takeover bid as an agreement plan. Consequently, it cannot be guaranteed that the Offer will be made or that the final terms of the Offer will be as set forth in this press release. In addition, it has undertaken to fund a co-funded financing of $ 300 million, at a price of $ 7.00, and the assumed backlash in that regard is subject to a variety of conditions and conditions, including satisfactory completion of regular due diligence. for both Aphria and Green Growth, agreement on mutually acceptable final documentation and other common commitments and conditions. No binding obligation of any kind has yet been made in this regard, and readers should not assume that such commitment will be made unless and in a binding instrument agreed upon by the estimated sources of funding which cannot and should not be adopted or ensured.
The offer will be conducted in accordance with National Instrument 62-104 – Takeover Bids and Issuer Bids and will be subject to a number of common terms, including: (i) it is deposited under the Offer and not withdrawn, at least 66 2/3% of the outstanding Aphria shares (calculated on a fully diluted basis), excluding Aphria shares held by Green Growth; (ii) receipt of any government, regulatory, stock exchange, and third party approvals that Green Growth considers necessary or desirable in connection with the Offer; (iii) there is no lawful prohibition of green growth which makes the offer or raises and pays for the aphria shares (iv) Aphria has not adopted or implemented a shareholder plan, disposed of any assets, incurred any significant debt, made changes in the capital structure or otherwise implemented or attempted to conduct a defensive tactic; (v) No material adverse change has occurred in Aphria's business, affairs, prospects or assets (v) Green Growth is not aware that Aphria has made any false statement of a material fact or omits to disclose a material fact such as to be made to any security authority; (vi) the approval of the shareholders in green growth in accordance with the guidelines of the Canadian Securities Exchange and (vii) statutory minimum condition that 50% of the Aphria shares have been offered to the Offer, except for Aphria shares held by or above which control is exercised by Green Growth (which cannot be waived). If the Offer continues, Green Growth expects to call during the first quarter of 2019 to a meeting of the shareholders to consider a decision to approve the issue of the Green Growth shares in connection with the Offer. Green Growth expects that the Offer, when done, will remain open for an acceptance period of at least 105 days from the date of dispatch of the takeover budget. It is within the power of Aphria to significantly reduce this minimum bid period so shareholders can receive the benefits of Green Growth's offer in just 35 days. Shareholders in the company are encouraged to contact Aphria and urge management and board to allow Green Growth's takeover bid to continue in the minimum timeframe allowed.
Green Growth Brands has retained Canaccord Genuity as its financial advisor, Norton Rose Fulbright Canada LLP as legal advisor, and Kingsdale Advisors as strategic shareholder and communications advisor and depositary.
About Green Growth Brands
The Green Growth brands expect to dominate the cannabis and CBD markets with a portfolio of emotional brands that people love. Led by renowned reseller Peter Horvath, the GGB team is full of decades of experience in building successful brands. Join the movement at GreenGrowthBrands.com.
Original press release
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