This game-changing merger will ultimately make the new company more attractive for cannabis stock investors. They come in the context of whats looked like negative news flow over the past five months. All rights reserved. The average analystprice target of C$22.05impliesupsidepotential of about24.6%to current levels. Tilray Has 64% Upside After "Perfect Match" Merger, Analyst Says, The IRS Is Urging Millions of Early Filers to Amend Their Tax Return, 1 Warren Buffett Index Fund Could Turn $100 Per Week into $1 Million, 2 Stocks That Could Join Apple, Microsoft, Amazon, and Alphabet in the $1 Trillion Club, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. 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. Say hello to what has become, at a stroke, a dramatically larger marijuana company: the new version of Tilray ( TLRY). After Tilrays (TLRY) shareholders voted in favor of the proposed merger Aphria (APHA) last Friday, the two cannabis companies announced today the completion of the transaction. Anheuser-Busch CEO on the Bud Light backlash: We never intended to be part of a discussion that divides people, Mark Zuckerbergs total 2022 pay rose because of the increased use of private aircraft, Elon Musk tells Tucker Carlson hell create TruthGPT chatbot to counter AIs liberal bias, Court tosses Berkeleys first-in-nation ban on natural gas in new construction. However, for the merger to be confirmed, it would have to be approved by TLRY stockholders. TipRanks->. 2023 InvestorPlace Media, LLC. Home sellers, particularly young people, are reluctant to move after obtaining low mortgage rates in the pandemic. Tilray shares closed Friday down 1.78%, but have gained 122% in the year to date. It was a juicy merger arbitrage opportunity that has since come down. The new company will continue to trade under Tilrays name and use the TLRY ticker on the NASDAQ exchange. People may receive compensation for some links to products and services on this website. As such, these devices are not designed to cure or treat disease. Regardless, the merger should save a lot of money. According to the merger ratio, APHA stock should trade at 0.8381x of TLRYs stock price. Against pro forma revenue of $693 million, what will be Tilray looks cheap by sector standards. There will be a chance to buy TLRY cheaper down the road. Related News:good natured Products Revenue Increases 65% In FY2020The Green Organic Dutchman Gives Update On OperationsAphria Shareholders Approve Tilray Merger. 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. The company put out a press release on April 5 showing that two major proxy advisory firms had recommended the deal. has gained 47% and the S&P 500 You can go short on Tilray stock and long on Aphria stock to benefit from the merger arbitrage. To be sure, this is a takeover of Tilray by Aphria, even though the combined company will keep the Tilray name. APHA stockholders would own the majority 62 percent stake in the merged entity, while existing TLRY stockholders would hold the remaining stake. Marijuana stocks experienced a surge in price on Monday after Governor Andrew Cuomo confirmed that his state was very close to lega STONERS ROTATION 2023 | A VESSEL CREATIVE COMPANY. Volkman: Yeah. Tilray's merger with Aphria, announced in December and set to close in Q2, will create the largest cannabis company. Check your inbox or spam folder to confirm your subscription. 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. 1125 N. Charles St, Baltimore, MD 21201. Aphria shareholders will receive 0.8381 shares of TLRY stock for every one share of APHA stock they own. 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. Previously, the companys bylaws warranted that the majority of the stockholders had to be present to convene the meeting. TLRY was trading at almost twice what it should have based on the merger ratio. Both stocks will, assuming the merger closes, end up in the same place. The delayed merger vote and the new quorum requirements have raised concerns. In March 2020, I recommended investors buy the dip at $3.50. In an all-stock deal agreed to last December, each Aphria share held as of April 30 was swapped for 0.8381 of a Tilray share. Market Realist is a registered trademark. Aphria shareholders voted in favor of the proposed merger with rival Tilray,which will create the worlds largest cannabis company by revenue. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. Marijuana stocks surge as NY Governor says state legalization is close. 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. Key details about the Aphria-Tilray merger. The highly anticipated merger between Aphria (TSX:APHA)(NASDAQ:APHA) and Tilray (NASDAQ:TLRY) is set to close in Q2.Insiders anticipate that the merged entity could exist as soon as April. +0.33% Simon said, "Our focus now turns to execution on our highest return priorities including business integration and accelerating our global growth strategy. The two companies see $79 millionin cost synergies achievable within two years. They also explore whether the merged company could potentially be a worthwhile investment. +5.49% Type a symbol or company name. 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. Stephanie Bedard-Chateauneuf for TipRanks->. *Average returns of all recommendations since inception. For a moment, there was a merger-related case for APHA stock regardless. On Monday, Tilray. lost 361 million CAD in the nine month period ending Feb. 28. Is there still an arbitrage opportunity available before the merger is complete? THCX, Type a symbol or company name. Aphria stockholders will get 0.8381 Tilray shares for each APHA share that they hold. Corinne Cardina: Let's talk about a big splashy deal. Moreover, vaporizing does not necessarily eliminate toxins. TIlray, however, is postponing its shareholder vote to April 30 (should have been tomorrow). Ciara Linnane is MarketWatch's investing- and corporate-news editor. However, the company moved the meeting to April 30. The Cannabis ETF For Aphria and its peers, there simply have been too many outside factors that keep getting blamed: slow regulators, the novel coronavirus pandemic, air pockets in demand. Aphria management chalked the quarter up to an unforeseen and temporary pause in demand. Management might be correct. Incidentally, there was a massive merger arbitrage in the TLRY and APHA merger. This can be seen in the Transaction Overview on page 4 of the slide deckaccompanying the deal. Nasdaq When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Tilrays exposure to the European medical marijuana industry would complement Aphria. Whats the TLRY-APHA merger date? However, since then, both TLRY and APHA have fallen sharply amid the sell-off in marijuana stocks. We use cookies to improve your experience. Offers may be subject to change without notice. Type a symbol or company name. They might be waiting for some kind of pop in the stock. Aphria has agreed to acquire U.S. craft beer company Sweetwater Brewing, which makes cannabis-infused beverages, and Tilray is a partner of Anheuser-Busch InBev. The pro-form enterprise value of the company is listed at $3.9 billion. The merged entity would have diversified global operations. Balsky is bullish on the business and expects progress from the government to legalize marijuana at the federal level. shareholders voted to approve the Canadian cannabis company's proposed merger with Aphria Inc. But again relatively speaking, they're going to be a big player in marijuana, they're going to be hard to ignore, they're going to be the largest Canadian marijuana company by far. On Monday, Tilray's shares closed 7.2% lower, against the 0.3% rise of the S&P 500 index. That firm generated revenue of $67 million in 2019. Marijuana stocks have been very volatile over the last few months. The merger would be subject to regulatory approvals. Written by The merger between Aphria and Tilray makes perfect sense. Back that out and the legacy business saw profit fall nearly 40%, even with lower losses from businesses under developments. The U.S. cannabis landscape continues to grow as more states open up for business. (See Tilray stock analysis on TipRanks). Simonsaid, "I want to thank all Aphria Shareholders for voting and approving the Arrangement. Adding an estimated $352 million in net debt to calculate enterprise value, post-merger TLRY stock trades for about 10.5x EV/revenue. Tilray surges 27% after $4 billion merger with Aphria creates the world's biggest cannabis company. 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. quotes delayed at least 15 minutes, all others at least 20 minutes. Uber reversed its decision and reactivated the driver after being contacted by MarketWatch. 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. Meanwhile, the combined company would have a market capitalization of around $7 billion at the current APHA stock price. 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. They're going by trailing 12-month revenue and I don't know if going forward that's sustainable. Please consult a licensed medical provider before using a vaporizer. The company is profitable, but not amazingly so. With Aphria profitable on an EBITDA (earnings before interest, taxes, depreciation and amortization) basis and Tilray hitting that bogey in Q4, the reduced costs should get the combined company into net profitability and positive free cash flow. Results for the fiscal third quarter (ending Feb. 28) were not promising on that front. Aphria shareholders voted in favor of the proposed merger with rival Tilray, which will create the world's largest cannabis company by revenue. Second, Aphria also now owns Sweetwater Brewing. +2.93% *Average returns of all recommendations since inception. Talking of marijuana stocks, they have started to look very overvalued at their peaks even if we discount all of the positives. TLRY stock was at $7.87 on Dec. 15, the day before the merger announcement. I think that's a good move because I think Tilray has a slightly stronger brand name and recognition. Tilray would acquire Aphria and the new entity would trade under the "TLRY . Were a community for all things stoner from entertainment to guides and smoking accessories, we honor the green goddess. You must be 21 years of age or older to view the page. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Tilray and Aphria are joining in what is being called a pot stock megamerger. However, there has been a sell-off since then. 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. On December 16th, Aphria (TSX: APHA) (NASDAQ: APHA) and Tilray (NASDAQ: TLRY) announced a pending stock-based merger. The cost savings will also lead to considerable improvements to the bottom line for the new company. Copyright 2023 MarketWatch, Inc. All rights reserved. Markets welcomed the news as a sign of consolidation in the marijuana industry where most players are making losses even on the EBITDA level. Shares of both companies traded higher on Wednesday, with Tilray stock up 22.74% at $9.66 and Aphria up 2.75% to $8.34. Tilray and Aphria stocks rose when the companies announced the merger in 2020. 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. Based on April 16 closing prices, APHA trades at 0.822x of what TLRY trades at, which is similar to the merger ratio. That admittedly is cheap by cannabis standards. Over the past 12 months, Aphria lost $163 million. The latest among these states is New Mexico. 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). Market Realist is a registered trademark. Stephanie Bedard-Chateauneuf for People may receive compensation for some links to products and services on this website. As for APHA stockholders, they will get 0.8381 Tilray shares for each Aphria share that they hold. 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