Which is not exactly a cannabis-infused beer because it's sold in the States. They rose sharply after Joe Biden won the election and later when Democrats took control of the Senate in January 2021. In a deal thats widely considered as a reverse merger, Aphria shareholders will receive 0.8381 Tilray shares for each APHA stock that they currently own. And that's crucial, given past results. TipRanks is the most comprehensive data set of sell side analysts and hedge fund managers. To make the world smarter, happier, and richer. And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution. Net cannabis revenue plunged by nearly one-fourth quarter-over-quarter. TLRY closed Wednesday at $25.29. Aphria stockholders will get 0.8381 Tilray shares for each APHA share that they hold. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. Eric Volkman has no position in any of the stocks mentioned. 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 cannabis industry will continue to consolidate into fewer well-established companies, that have profitability in view. Aphria shareholders voted in favor of the proposed merger with rival Tilray, which will create the world's largest cannabis company by revenue. Aphrias shareholders have already voted and approved the merger on April 15. Key details about the Aphria-Tilray merger. Per the companys earnings releases, low-margin distribution revenue has totaled nearly $290 million over the past four quarters. The products featured have not been directly evaluated by the US Food and Drug Administration (FDA). Although Tilray is down by around 50% year to date, Aphria is up by 72% this year. Corinne Cardina has no position in any of the stocks mentioned. Copy and paste multiple symbols separated by spaces. 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. Back that out and the legacy business saw profit fall nearly 40%, even with lower losses from businesses under developments. 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). Above $13, that seems like a problem, and a reason to stay on the sidelines for now. 2023 TheStreet, Inc. All rights reserved. After all, there is always the possibility that it could fall through. Check your inbox or spam folder to confirm your subscription. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Aphria's CEO Irwin Simon is taking over that role with the reconstituted Tilray, and has also become the chairman of the new company's board of directors. Relative to FY2021 (ending March) consensus estimates, Canopy Growth (NASDAQ:CGC) trades at about 20x EV/revenue, and Sundial Growers (NASDAQ:SNDL) an even higher multiple. A cheaper price helps but it doesnt help enough yet. Therefore I suspect that, although the merger is likely to go through, most investors should look for another entry point to invest in TLRY stock. But yeah, the combined company is going to be called Tilray, they claim they are the largest global cannabis company in the world but that's a little bit fudging things. Tilray (NASDAQ:TLRY) shareholders will vote on the all-stock merger with Aphria (NASDAQ:APHA) on April 30. Are Canadian Pot Stocks Headed for Another Crash? The Motley Fool has a disclosure policy. Whats the TLRY-APHA merger date? *Average returns of all recommendations since inception. Ciara Linnane is MarketWatch's investing- and corporate-news editor. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. The spread has since narrowed to less than 2%. What's happening with the TLRY and APHA merger? Copy and paste multiple symbols separated by spaces. Covid-19 related lockdowns have presented unique challenges across Canadian and German markets. Invest better with The Motley Fool. The pro-form enterprise value of the company is listed at $3.9 billion. Also, there are significant synergies on the cost front as well as the sales and distribution side. TLRY scheduled the stockholder meeting to approve the merger with APHA on April 16. Uber reversed its decision and reactivated the driver after being contacted by MarketWatch. Also, in SPACs, there can be significant arbitrage between the common stock and the warrants. If that doesnt happen, as is often the case, more jittery and short-term oriented shareholders could move out. Market Realist is a registered trademark. Say hello to what has become, at a stroke, a dramatically larger marijuana company: the new version of Tilray (TLRY). Corinne Cardina: Let's talk about a big splashy deal. Deal Details Under the deal terms, Aphria shareholders will obtain 0.8381 shares of Tilray while owning 62% of the new equity. Meanwhile, Tilrays current CEO and Chairman will be one of the new companys board of directors. Aphria(APHA)andTilray(TLRY)first announcedtheir proposeddealin December of last year. Tilray Inc. *Average returns of all recommendations since inception. The merger between Aphria and Tilray makes perfect sense. Under the terms of the proposed deal, Aphria shareholders will receive 0.8381 of a Tilray share of class 2 common stock for each Aphria share owned. You can still play the arbitrage in the Tilray-Aphria merger even if it isn't as juicy as it was two weeks ago. Aphria CEO Irwin D. Simon would lead the new company in a dual role as CEO and chairman, while Tilray CEO Brendan Kennedy would be a director on the board. Copyright 2023 Market Realist. 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. As an example, from the option chain above, let's examine the APHA July 16th, 2021 Calls (since the merger has the potential to close in May) with a strike price of $16/Aphria Share (since the . That business has gross margins of just 13% and not all of the revenue comes from cannabis. Against pro forma revenue of $693 million, what will be Tilray looks cheap by sector standards. December 16, 2020 10:38 am The marijuana industry got a jolt Wednesday morning following the announcement of a reverse merger of Aphria Inc. ( NASDAQ: APHA) and Tilray Inc. ( NASDAQ: TLRY). Valuation is acceptable, but not compelling. Nasdaq The new company will continue to trade under Tilrays name and use the TLRY ticker on the NASDAQ exchange. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. +5.49% People may receive compensation for some links to products and services on this website. Current share. Management might be correct. The delayed merger vote and the new quorum requirements have raised concerns. Tilray and Aphria stocks rose when the companies announced the merger in 2020. In terms of leadership for the combined company, Aphrias current CEO and Chairman, Irwin Simon will work in the same capacity. TLRY stock price would likely fall if the deal does not go through, given the combination of the two companies will have strengthened revenue and financials. LEAMINGTON, Ontario & NANAIMO, British Columbia-- ( BUSINESS WIRE )--Aphria Inc. (" Aphria ") (TSX: APHA and Nasdaq: APHA ), a leading global cannabis company inspiring and empowering the. Tilray would acquire Aphria and the new entity would trade under the "TLRY . 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. The deal is expected to close in the second quarter. Aphria has a company called CC Pharma based in Germany, which is very active and quite strong on the German medical marijuana market. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. The condition warranted that Tilray amends its certificate of incorporation known as the Charter Amendment Proposal in case the merger isn't approved by Tilray stockholders. Corey Goldman covers spot news, finance, capital markets and economics for TheStreet. Yet ownership of the combined company via TLRY was at one point valued more than 30% higher than it was via APHA. By browsing this site, you agree to our cookies. I have also written about the potential merger synergies with both companies. When two companies announce a merger, the two stocks tend to trade according to their merger ratio. 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. Whats happening with the Tilray and Aphria merger? Written by As these markets begin to re-open, Tilray is poised to strike and transform the industry with our highly scalable operational footprint, a curated portfolio of diverse medical and adult-use cannabis brands and products, a multi-continent distribution network, and a robust capital structure to fund our global expansion strategy and deliver sustained profitability and long-term value for our stakeholders.". So it's building its brand recognition in advance of the company being actually able to put weed in the stuff. Looking at the Canadian adult-use marijuana market, Tilray is strong in Quebec, while Aphria has a leading position in Alberta and Ontario. 2023 InvestorPlace Media, LLC. Whether or not Tilray 2.0 can make their production really cost-effective and even profitable, heaven forbid, it's a whole other story but at least they are on the path of doing so here. Aphria didnt do so in Q3, and that is a red flag. For one, this will make the combined company the largest cannabis company by revenue, as described on page 5 of their investor presentation. Tilray will hold a meeting of shareholders to vote on the reverse takeover by Aphria onApril 30. 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. Offers may be subject to change without notice. However, since then, both TLRY and APHA have fallen sharply amid the sell-off in marijuana stocks. Thats not cheap, either. Article printed from InvestorPlace Media, https://investorplace.com/2021/04/apha-stock-hard-pass-ahead-tilray-merger/. The combined U.S. operations will focus on Sweetwater and Manitoba Harvest, which makes branded hemp and CBD products. There will be a chance to buy TLRY cheaper down the road. Email us at [emailprotected] with your questions/topic suggestions and we will get back to you! Making the world smarter, happier, and richer. Offers may be subject to change without notice. SweetWater Brewing makes a product called 420 Strain, 420 of course being not-so-secret code for marijuana. Aphria said that the reverse-acquisition of Tilray was approved by 99.38% of the shares represented at its shareholders' meeting. On Monday, Tilray announced that its "business combination" with peer Aphria (APHA) had been completed, and the two are now one. Action Alerts PLUS is a registered trademark of TheStreet, Inc. Take Charge of Your Money During our April Sale! As for APHA stockholders, they will get 0.8381 Tilray shares for each Aphria share that they hold. This means be patient and look to average costs into TLRY stock. The case for APHA stock has taken a big hit in recent months. But the pro forma revenue of $693 million cited in December includes two revenue streams that might not be as valuable. By using stonersrotation.com, you agree to these terms before purchasing from this website. This is easily achievable especially with Aphrias recent acquisitions of U.S. craft beer company Sweetwater Brewing. Shares of both Tilray and Aphria are up today $TLRY $APHA. Aphrias two German assets - a distribution center for medical prescriptions and a cultivation facility - were particularly attractive. Previously, the companys bylaws warranted that the majority of the stockholders had to be present to convene the meeting. Marijuana stocks surge as NY Governor says state legalization is close. 1125 N. Charles St, Baltimore, MD 21201. Market Realist is a registered trademark. Yet Aphria is the business that needs to do more of the heavy lifting post-merger. Simply click here to get the full story now. Aphria ( APHA ) and . Copyright 2023 Market Realist. Benzinga spoke . You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. Cardina: Can you tell us what investors need to know? APHA stockholders would own the majority 62 percent stake in the merged entity, while existing TLRY stockholders would hold the remaining stake. On March 1, APHA stock closed at $18.76, while TLRY stock closed at $25.56. Aphria's shareholders have already voted and approved the merger on April 15. She is based in New York. No wonder both the stocks rallied after the merger was announced. In March 2020, I recommended investors buy the dip at $3.50. The merger will also generally offer the new company access to capital and improved funding. 3 Stocks to Buy That Could Be the Next Green Energy Leader, Aphria Stock Looks Like a Hard Pass Ahead of the Tilray Merger. Whats the TLRY-APHA merger date and is there still an arbitrage opportunity available before the merger is complete? According to executives from both Aphria and Tilray, the merger is targeted at cost savings and creating synergy. Mar. Currently, Tilray and Aphria are down 62 percent and 42 percent, respectively, from their 52-week highs. 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. Canadian operators desperately need consolidation amid an ongoing supply glut. Last week, BofA Securities analyst Heather Balsky initiated coverage of the stock with a Buy rating and a $23.00 price target (26.2% upside potential). Second, Aphria also now owns Sweetwater Brewing. Eric Volkman has no position in any of the stocks mentioned. So basically we can consider it a reverse merger. Tilrays exposure to the European medical marijuana industry would complement Aphria. Adjusted EBITDA did rise modestly but thanks to a $4.7 million increase from a full quarter of Sweetwater, for which Aphria paid $300 million. Markets welcomed the news as a sign of consolidation in the. That equals 632 million in losses (U.S. $505 million). (See Aphriastock analysis on TipRanks). They also explore whether the merged company could potentially be a worthwhile investment. Another indicator that the deal will go through is that independent proxy advisory firms have recommended the deal to institutional shareholders. However, given the fragmented nature of the marijuana industry, I dont see any real regulatory hurdle for the merger. Investors found the prospect of a Tilray-Aphria merger exciting. quotes delayed at least 15 minutes, all others at least 20 minutes. I should mention, they're also quite active in international markets. 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. It was a juicy merger arbitrage opportunity that has since come down. Under the terms, Aphria shareholders receive 0.8381 of a Tilray share for each common share of Aphria. 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. Exactly what we want to see in a rational market that trades away merger arb: $APHA +12%$TLRY +2%. Anytime a company, or companies, are in a position to cut down on that, to combine assets, to rationalize like that, that's a positive development. Regardless, the merger should save a lot of money. At times, the arbitrage is because the market expects the merger deal to fall through. Aphria shareholders will also own 68% of the new . Written by The big problem across the marijuana industry these days is production. Last week, Aphria stockholders approved the deal overwhelmingly. if you are considering starting a new position in either Tilray or Aphria stock right now, APHA stock gives you a little bit . TipRanks is the most comprehensive data set of sell side analysts and hedge fund managers. Related News:OrganiGram Holdings 2Q Revenue Misses Estimates; Shares Plunge 10%Aphrias 3Q Sales and EPS Miss Estimates; Shares Plunge 14%Shaw Communications 2Q EPS and Revenue Beat Estimates. It's worth taking a look at. However, I do believe that Tilray shareholders will likely approve the deal. Tilray shares closed Friday down 1.78%, but have gained 122% in the year to date. A deviation in stock prices can lead to merger arbitrage. In reality, this is Aphria taking over Tilray. Making the world smarter, happier, and richer. The cost savings will also lead to considerable improvements to the bottom line for the new company. The Motley Fool has no position in any of the stocks mentioned. Adding an estimated $352 million in net debt to calculate enterprise value, post-merger TLRY stock trades for about 10.5x EV/revenue. Average costs into TLRY stock raised concerns starting a new position in any of the revenue comes from...., the merger on April 30 corporate-news editor since come down the products featured have been. Offer the new company access to capital and improved funding to add,. S crucial, given the fragmented nature of the heavy lifting post-merger 50 % year to date delayed... 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Site, you agree to these terms before purchasing from this website Tilray or Aphria stock right,... Still an arbitrage opportunity that has since come down they will get 0.8381 Tilray shares for common... A registered trademark of TheStreet, Inc. Take Charge of your Money During our April Sale the quarter! U.S. $ 505 million ) achievable especially with aphrias recent acquisitions of U.S. craft beer company Sweetwater.! Eric Volkman has no position in any of the shares represented at its shareholders ' meeting arbitrage the! ) andTilray ( TLRY ) shareholders will obtain 0.8381 shares of Tilray while owning 62 % of shares...