Aphria Inc (TSX: APHA) (NASDAQ: APHA) has closed the previously announced SweetWater Brewing Company transaction. The transaction sees one of the largest independent craft brewers in the US now brought under the Aphria banner.
The acquisition is said to be used to “accelerate Aphria’s entry into the US ahead of federal legalization of cannabis.” SweetWater currently owns the 420 beverage lineup of alcoholic beverages that utilize hemp terpenes and flavors, which the company has indicated it plans to capitalize on upon a legalization event.
The company was acquired for a total purchase price, consisting of US$250 million in cash and US$50 million in stock. The transaction was funded via cash on hand as well as its at-the-market program, with the company selling shares directly into the market to raise proceeds. An additional $66 million may be paid in cash under certain earn-out arrangements that exist through to 2023. The transaction price was said to be based on 12.5x adjusted EBITDA for the firm.
The acquisition of SweetWater is said to be immediately accretive to EBITDA for Aphria.
Aphria last traded at $10.14 on the TSX.
Information for this briefing was found via Sedar and Aphria Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
