Hexo Corp Announces Intent To Conduct Financing To Fund Redecan Acquisition
Hexo Corp (NYSE: HEXO) (TSX: HEXO) is evidently in need of funds. The company last night after the bell announced that it would be conducting a proposed public offering, the terms of which have yet to be set. The financing is to be lead by both Cantor Fitzgerald and Alliance Global Partners.
No terms have been set at all, with the financing referred to as an overnight marketed public offering – meaning the company is currently reviewing potential demand for a shotgun financing via units of the company.
Pricing will reportedly be “in the context of the market,” with the firm already intending to offer a 15% over-allotment option in conjunction with the financing.
Net proceeds from the financing are to be used for a portion of the cash required to close on its Redecan acquisition, as well as expenditures for the firms US expansion plans.
The overnight marketed offering follows the company raising US$360 million in senior secured convertible notes earlier this year, raising gross proceeds of US$327.6 million in the process. The company also has an outstanding at-the-market financing facility, which as of June 14 had raised $47.2 million in funds. The firm reported cash on hand of $194 million as of June 14 as well.
However, the company in May agreed to acquire Redecan, a private cannabis operator, for a total price tag of $925 million – of which, $400 million is to consist of cash consideration. In short, the company will need to raise significant sums of cash if it intends to maintain its third quarter closing timeline.
Hexo Corp last traded at $4.10 on the TSX.
Information for this briefing was found via Sedar and Hexo Corp. 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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
