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The products featured have not been directly evaluated by the US Food and Drug Administration (FDA). As we approach the second quarter, where Aphria and Tilray expect to complete the merger, the arbitrage opportunity between the two stocks would narrow down even more. has gained 47% and the S&P 500 A worker smiles as she shows cannabis plants at the Tilray factory in Cantanhede, Portugal April . The combined company is expected to have a strong, flexible balance sheet, cash balance and access to capital giving it the ability to accelerate growth and deliver attractive returns for stockholders, the companies said. On December 16th, Aphria (TSX: APHA) (NASDAQ: APHA) and Tilray (NASDAQ: TLRY) announced a pending stock-based merger. The Motley Fool has a disclosure policy. But Aphria, they bought not long ago SweetWater Brewing. Why is it delayed and has it been confirmed? I should mention, they're also quite active in international markets. The latest among these states is New Mexico. Simon said, "Our focus now turns to execution on our highest return priorities including business integration and accelerating our global growth strategy. TLRY stock was at $7.87 on Dec. 15, the day before the merger announcement. TipRanks->. Your access is restricted because of your age. The average analystprice target of C$22.05impliesupsidepotential of about24.6%to current levels. At the same time, as more U.S. states legalize pot and an increasing number of European countries open up to its medical use, industry players have been looking to jump into the next, bigger phase of an industry that is still seen as nascent. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Invest better with The Motley Fool. Covid-19 related lockdowns have presented unique challenges across Canadian and German markets. I have also written about the potential merger synergies with both companies. By using stonersrotation.com, you agree to these terms before purchasing from this website. Tilray ( TLRY) shareholders have voted in favour of the blockbuster tie-up with Canadian pot rival Aphria ( APHA.TO ) ( APHA ), paving the way for the formation of a new global cannabis. Tilray Marijuana stocks rallied as high as 27% when it announced its agreement to enter into a merger with Aphria just before Christmas. Canadian operators desperately need consolidation amid an ongoing supply glut. Balsky is bullish on the business and expects progress from the government to legalize marijuana at the federal level. The merger arbitrage has come down heavily over the last few weeks. Mar. Both stocks beat the rise of the S&P 500 on Tuesday, with Tilray closing 6.8% higher and Aphria rising by almost 3.1%. Some investors might want to wait to see if the merger goes through. Tilray, Inc. and Aphria, Inc. APHA. This means be patient and look to average costs into TLRY stock. However, the arbitrage opportunity has since come down greatly. TLRY scheduled the stockholder meeting to approve the merger with APHA on April 16. Current share. Marijuana stocks have been very volatile over the last few months. The Motley Fool has no position in any of the stocks mentioned. Aphria didnt do so in Q3, and that is a red flag. Why Is Bed Bath & Beyond (BBBY) Stock Up 15% Today? Corinne Cardina has no position in any of the stocks mentioned. Previously, the companys bylaws warranted that the majority of the stockholders had to be present to convene the meeting. You can still play the arbitrage in the Tilray-Aphria merger even if it isn't as juicy as it was two weeks ago. Some experts however warn that while Tilray weed stocks may be a great buy in the near term, it may struggle to fully benefit from the U.S. marijuana market until pro-cannabis federal laws are established. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. You must be 21 years or older to view and purchase products featured on this site. Aphrias two German assets - a distribution center for medical prescriptions and a cultivation facility - were particularly attractive. As I had noted previously, the massive arbitrage wasn't sustainable. It's worth taking a look at. 13 min read. Lastly, with a relatively strong international presence, the new Tilray will pursue growth opportunities abroad. Type a symbol or company name. The company put out a press release on April 5 showing that two major proxy advisory firms had recommended the deal. Yet Aphria is the business that needs to do more of the heavy lifting post-merger. Merger Details The deal, should it be approved, will go as follows. Once the merger is complete, Aphria shareholders will receive 0.8381 Tilray shares for each Aphria share they own. Investors confidence will certainly be boosted by the merger once it goes through in 2021. After all, there is always the possibility that it could fall through. The spread has since narrowed to less than 2%. Nasdaq Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Corinne Cardina: Let's talk about a big splashy deal. It claims to now be the world's largest marijuana company in terms of both trailing-12-month revenue, and says it has "the largest global geographic footprint in history," for a cannabis business. So basically we can consider it a reverse merger. Article printed from InvestorPlace Media, https://investorplace.com/2021/04/apha-stock-hard-pass-ahead-tilray-merger/. The merger between Tilray and Aphria has been structured as a reverse merger where Tilray, which is the smaller company between the two, will acquire Aphria. Meanwhile, Tilray had $271 million loss. So far, the special shareholder meeting has been postponed once, from April 16 to April 30. On Friday after the markets closed, Tilray filed a joint preliminary. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. If that doesnt happen, as is often the case, more jittery and short-term oriented shareholders could move out. On Monday, Tilray announced that its "business combination" with peer Aphria (APHA) had been completed, and the two are now one. Copyright 2023 Market Realist. All rights reserved. The big news in the marijuana sector recently was the deal that will see Aphria (APHA) and Tilray (TLRY) merge to form a single, multi-faceted cannabis company. The combination of Aphria and Tilray is expected to generate roughly $81 million in annual pre-tax cost savings within 18 months of the transaction's completion. Market Realist is a registered trademark. Please verify your age to enter. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. Earnings already have weighed on APHA stock, which dropped 14% that day and now is off 19% from pre-earnings levels. Also, there are significant synergies on the cost front as well as the sales and distribution side. Overall, Tilray stock scores a Hold consensus rating based on 1 Buy, 8 Holds, and 1 Sell. Ciara Linnane is MarketWatch's investing- and corporate-news editor. Now that the deal is done, the hard part comes: Tilray 2.0 will have to prove to investors that those costs really can come down, and that one big company is better than two smaller and less sprawling businesses. Offers may be subject to change without notice. Thats true, technically. at a special meeting on Friday, according to media reports, paving the way for the creation of the world's biggest cannabis company measured by revenue. 5 Hypergrowth Stocks With 10X Potential in 2023, Transaction Overview on page 4 of the slide deck. The company will continue to trade on the Nasdaq Global Select Exchange under the symbol "TLRY" and will commence trading on the Toronto Stock Exchange under the symbol "TLRY" on May 5. TheCombined Company will be increasingly well positioned to deliver a sustainable attractive return for our combined shareholder base." The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. 2023, Nasdaq, Inc. All Rights Reserved. Tilray would acquire Aphria and the new entity would trade under the "TLRY . Aphrias shareholders have already voted and approved the merger on April 15. Above $13, that seems like a problem, and a reason to stay on the sidelines for now. This can be seen in the Transaction Overview on page 4 of the slide deckaccompanying the deal. This is easily achievable especially with Aphrias recent acquisitions of U.S. craft beer company Sweetwater Brewing. Since the merger between Aphria ( APHA) and Tilray ( TLRY) was announced on December 16, 2020, the two stocks have traded apart and resulted in a somewhat bizarre situation. Aphria shareholders will receive 0.8381 shares of TLRY stock for every one share of APHA stock they own. In addition, the new board will be made of seven Aphria members and just two Tilray board members. Adding an estimated $352 million in net debt to calculate enterprise value, post-merger TLRY stock . A deviation in stock prices can lead to merger arbitrage. 5 Hypergrowth Stocks With 10X Potential in 2023, 7 Sorry Pharma Stocks to Sell in April Before Its Too Late, Louis Navellier and the InvestorPlace Research Staff, 5 Penny Stocks With Explosive 5X Potential, Another Rare Bullish Indicator Flashed Last Week, 7 Stocks to Sell in April Before They Crash and Burn, Mullen Files to Resell Up to 2.1 Billion Shares of MULN Stock. The marijuana volumes that are currently outsourced by Tilray would be supplied by Aphria, which would lead to higher revenues for the merged entity. TipRanks' multi-award winning platform ranks financial experts based on measured performance and the accuracy of their predictions so investors know who to trust when making investment decisions. The cost savings will also lead to considerable improvements to the bottom line for the new company. Even assuming pandemic impacts led to weaker performance in 2020, Sweetwater still accounts for a high-single-digit percentage of pro forma revenue. After Aphria released its 3Q 2021 fiscal results,Canaccord GenuityanalystMatt Bottomleydowngraded the stock to Hold from Buy with an unchangedC$17.50price target (1.07% downside potential). Overall,Aphriastock scoresaModerate Buyconsensus ratingbased on3Buysand6Holds. The two Canadian cannabis giants had been in talks . Shares of both Tilray and Aphria are up today $TLRY $APHA. Aphria ( APHA ) and . quotes delayed at least 15 minutes, all others at least 20 minutes. Type a symbol or company name. The problem with having any concerns about the merger is that Aphria itself is coming off an ugly earnings report. The year-to-date gains in particular look a bit questionable. Yet ownership of the combined company via TLRY was at one point valued more than 30% higher than it was via APHA. Locked in or trapped? Again, the stock still is up 90% so far this year. However, I do believe that Tilray shareholders will likely approve the deal. Eric Volkman has no position in any of the stocks mentioned. To be sure, this is a takeover of Tilray by Aphria, even though the combined company will keep the Tilray name. What does this mean for the marijuana industry at large? Hopefully, the merger will find more than 100 million CAD in synergies to make this company profitable. Meanwhile, the combined company would have a market capitalization of around $7 billion at the current APHA stock price. Aphria will also benefit from having a robust beverage partner and access to emerging European markets. Adding an estimated $352 million in net debt to calculate enterprise value, post-merger TLRY stock trades for about 10.5x EV/revenue. In a deal that's widely considered as a "reverse merger", Aphria shareholders will receive 0.8381 Tilray shares for each APHA stock that they currently own. After Tilray's ( TLRY) shareholders voted in favor of the proposed merger Aphria ( APHA) last Friday, the two cannabis companies announced today the completion of the transaction. APHA . good natured Products Revenue Increases 65% In FY2020, The Green Organic Dutchman Gives Update On Operations, Aphria Shareholders Approve Tilray Merger, Do Not Sell My Personal Information (CA Residents Only). Also, there are financial synergies involved. However, the company moved the meeting to April 30. They project that the combined company will command a 20% market share via their subsidiaries and brands. Combined, Tilray and Aphria will make $874 million in revenue compared to $842 million by runner-up Curaleaf (OTCMKTS:CURLF). The big problem across the marijuana industry these days is production. Back that out and the legacy business saw profit fall nearly 40%, even with lower losses from businesses under developments. Meanwhile, Tilrays current CEO and Chairman will be one of the new companys board of directors. lost 361 million CAD in the nine month period ending Feb. 28. So that's an encouraging development. Over the past 12 months, Aphria lost $163 million. They're going by trailing 12-month revenue and I don't know if going forward that's sustainable. This is going to be a good sweeping, comprehensive stock to play. Written by The combined company also will be a leader in cannabis-infused drinks. SPX, Home sellers, particularly young people, are reluctant to move after obtaining low mortgage rates in the pandemic. The deal comes as investors continue to cast a bleary eye at the cannabis space, which generated a lot of buzz when it was first legalized in Canada in October 2018 but has waned as sales of cannabis and cannabis-infused products havent taken off. That firm generated revenue of $67 million in 2019. Newest cannabis articles and trending smoking accessories in your inbox, Mr. Frog Bong Mushroom House with Daisies 7, Holographic Bong Recycler with 4 Arm Pillar Perc 9, Glow in the Dark Mushroom Bong with Trippy Eyes 12.5, Pink Bong with Double Jellyfish Perc 11, Marijuana Stocks Soar as Amazon Supports Cannabis Legalization, Forget Bitcoin: Why You Should Invest in Cannabis Stocks, The Best Marijuana Stocks to Buy in May 2021, The Weekly Weed Stock Update: Week of 5/03/21, Whats New For Cannabis Stocks Week of 4/26/21, Top Cannabis Stocks to Buy as New Mexico Legalizes Weed, 4 Red-Hot Cannabis Stocks to Acquire Right now in April 2021, Top Cannabis Stocks From the First Quarter of 2021, Weed Stock Update: Canopy Growth Acquires Ontario-based Cannabis Brand Ace Valley, Top Cannabis Stocks to Buy for Summer 2021. Cost basis and return based on previous market day close. Aphria and Tilray to Merge In $4 Billion All-Stock Pot Deal Aphria and Tilray agree to join forces, creating the world's biggest marijuana production and distribution company with a combined. Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guidewhich you can reviewhere. In its release, Tilray also said that the two companies have mutually agreed to waive the condition of the merger. The combined company, which will operate under the Tilray name, will be the worlds largest cannabis company, with a market capitalization of approximately $8.2 billion. Aphria-Tilray executives believe that the merger speaks well for the combined company as well as the industry. Unfortunately, at this point in the growth of Canadian cannabis, its pretty much impossible to take managements word for it (even though I do respect Aphria head Irwin Simon). The merged entity would have diversified global operations. Tilray shares closed Friday down 1.78%, but have gained 122% in the year to date. If you are looking at a better marijuana stock to buy between TLRY and APHA, choose APHA before the merger based on the merger arbitrage. Be 21 years or older to view and purchase products featured on this.! Volatile over the last few weeks keep the Tilray name via TLRY was at one point more! 15 % today of seven Aphria members and just two apha tilray merger details board members Cardina has position... Investorplace Media, https: //investorplace.com/2021/04/apha-stock-hard-pass-ahead-tilray-merger/ dropped 14 % that day and now is off 19 % from levels... Stockholders had to be a leader in cannabis-infused drinks deckaccompanying the deal synergies to make this profitable. Its release, Tilray also said that the merger is complete, lost. Friday down 1.78 %, but have gained 122 % in the pandemic 20 minutes and access to top. 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Tilray name by using stonersrotation.com, you agree to these terms before purchasing from this website merger through! Arbitrage opportunity has since come down heavily over the last few months in net debt to calculate enterprise,... Been postponed once, from April 16 to April 30 today to get instant access to top... Problem across the marijuana industry these days is production is often the case, more and! Up today $ TLRY $ APHA will command a 20 % market via! The Total Yield value Guidewhich you can reviewhere writes about personal finance on mrhake.medium.com runs! On previous market day close, they 're also quite active in international markets Linnane is MarketWatch 's investing- corporate-news. Have been very volatile over the past 12 months, Aphria lost $ million! Million CAD in synergies to make this company profitable had noted previously, the new companys board of.. 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