Sundial Growers (NASDAQ: SNDL) has taken a page out of the Tilray (NASDAQ: TLRY) playbook by diversifying its operations into the beverage alcohol space. The company last night announced that it has reached an agreement to acquire Alcanna Inc (TSX: CLIQ), a liquor retailer primarily based in Alberta.
Alcanna is the largest private liquor retailer in Canada, with a total of 171 locations open under three separate banners. The firm is also a major shareholder in Nova Cannabis (TSX: NOVC), which it owns a 63% stake in, resulting in Sundial now owning a majority of one of its competitors following the recent Spiritleaf Holdings acquisition.
The transaction is being justified by Sundial in that it will provide synergies with its recent acquisition of Spiritleaf Holdings, which closed earlier this year. The firm now claims it will have ownership of some 170 retail cannabis locations across the country. Additionally, $15 million in additional EBITDA annually is expected to be realized by the firm, with Alcanna currently boasting $16.4 million in trailing twelve month free cash flow.
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The all-stock transaction will see Alcanna shareholders receive the equivalent of $9.12 per share in Sundial stock, resulting in a total transaction pegged at roughly $346 million. Under the terms of the deal, Alcanna shareholders are to receive 10.69 shares of Sundial for every share of Alcanna held, representing a 39% premium.
The transaction is currently slated to close in December at the earliest, following the approval of Alcanna shareholders.
Sundial Growers last traded at $0.65 on the Nasdaq.
Information for this briefing was found via Sedar and the companies mentioned. 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.
