A wholly-owned subsidiary of Aurora has acquired a controlling interest in Bevo Agtech Inc. (Bevo), the sole parent of Bevo Farms Ltd., one of the largest suppliers of propagated vegetables and ornamental plants in North America.
The transaction allows Aurora to immediately benefit from a profitable, cash flow positive and growing business.
Aurora has stated that it may have the potential to drive long-term value to Aurora’s existing cannabis business via the application of Bevo’s industry leading plant propagation expertise.
Read more: Analysts estimate $171.51 million in sales for Aurora Cannabis this year
Through its wholly-owned subsidiary, Aurora will acquire 50.1 per cent of Bevo’s outstanding common shares, take a controlling position on Bevo’s board of directors and financially consolidate Bevo.
Bevo’s experienced management team are to remain significant shareholders and stay in place to embark on a robust growth plan, including the use of the Aurora Sky facility for orchid cultivation and vegetable propagation.
CEO of Aurora, Miguel Martin, commented: “This investment once again demonstrates our disciplined capital allocation approach and is consistent with both our short term needs and long-term vision to be the leading global cannabis company.
“Bevo’s track record in generating not only positive Adjusted EBITDA but free cash flow, world class propagation expertise, and established distribution networks in Canada and the United States makes them an ideal strategic partner.
“We expect this investment and collaboration between industry leaders will drive significant shareholder value and synergies for both parties. We are also excited about Bevo repurposing Aurora Sky and the potential to expand the scale and scope of their business and saving significant costs previously expected in connection with the wind down and sale of the facility.”
Founded in 1986, Bevo operates 63 acres of greenhouse in British Columbia, Canada; is led by a management team with over 85 years of agricultural experience, and supplies greenhouses, nurseries, field farms and wholesalers. Bevo will continue to be run by existing management team.
President and CEO of Bevo, Leo Benne, commented: “Since inception, Bevo has taken great pride in utilizing state-of-the-art technology to become a leading plant propagator in North America.
“We are delighted to join forces with Aurora to pursue our high growth strategy, starting with our move into Alberta which allows us to significantly expand Bevo’s addressable market. We are incredibly happy that the Aurora team is committed to keeping all of our facilities dedicated to our customer base, and to expanding our operations into Alberta through the addition of the Aurora Sky facility.
“It is clear that the Aurora team is deeply aligned with our existing business plans and objectives for profitable growth, and we look forward to building upon the strengths of Aurora as a sponsor to accelerate our business.”
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