Cannapany on June 15, 2022 No Comments
The cannabis company is altering parts of the deal to make it more attractive
It was previously announced that Tilray Brands was in the process of filing paperwork to acquire debt from Hexo. Now, amendments have been announced to improve the terms of this agreement to acquire all outstanding principal, plus accrued and unpaid interest, under a secured convertible note issued by Hexo. Among the most notable of the amendments is a reduction of the conversion price under the note from $0.66 to $0.31 per share, as well as an additional discount on the purchase price of Tilray Brands.
Irwin D. Simon, president and CEO of Tilray Brands, says he and his team remain confident that Hexo continues to be considered the strategic partner for the firm in Canada. As such, Simon looks forward to closing the transaction next month and working with the new partner to be able to deliver on the promise and potential of the partnership for shareholders, employees and consumers.
Charlie Bowman, Hexo’s president and CEO, added, “The strategic alliance with Tilray Brands accelerates HEXO’s operational turnaround and unlocks capital to expand our market leadership globally. The partnership is an essential next step in improving our capital structure, and we’re confident that the synergies realized will reset the industry.”
As announced from the outset, the joining of strategic forces between the two organizations is expected to deliver a number of financial and commercial benefits to each other. Under the new amended agreements, Tilray will acquire the Hexo note, which includes 100% of the current outstanding balance of $185 million of the HEXO note. The purchase price will be satisfied, in part, by the issuance to HTI of a $50 million convertible unsecured promissory note. At the same time, the remainder will be covered in Tilray Class 2 common stock and cash.
While the new amendments are subject to the satisfaction of specified conditions, the parties expect to close on or about July 15. The amended agreements also extend the outside closing date of the transactions to August 1, 2022.
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