Is the merger a done deal? Tilray and Aphria are joining in what is being called a pot stock megamerger. Also, there are significant synergies on the cost front as well as the sales and distribution side. +2.93% Market Realist is a registered trademark. Looking at the ratio, APHA's stock price was 0.734x of TLRYs stock price. Also, there are financial synergies involved. (See Aphriastock analysis on TipRanks). Aphrias pending merger with Tilray (NASDAQ:TLRY) admittedly makes some sense. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. Copy and paste multiple symbols separated by spaces. Your access is restricted because of your age. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Market Realist is a registered trademark. The average analyst price target of $24.29 implies an upside potential of about 33% from current levels. has gained 47% and the S&P 500 Lastly, with a relatively strong international presence, the new Tilray will pursue growth opportunities abroad. 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 has delayed the merger vote with Aphria. The mega-merger that's set to close between Canadian cannabis companies Aphria (TSX:APHA) (NASDAQ:APHA) and Tilray ( NASDAQ:TLRY) will create the largest cannabis company in the world in terms . Copy and paste multiple symbols separated by spaces. Once the merger is complete, Aphria shareholders will receive 0.8381 Tilray shares for each Aphria share they own. That's why we're seeing prices coming down. Probably tells you something about Aphria too. Tilray lost 271 million CAD for the year ending Dec. 2020 and Aphria has lost 361 million CAD in the nine month period ending Feb. 28. Nasdaq Tilray (NASDAQ: TLRY) & Aphria (NASDAQ: APHA) Merger Tilray (TLRY) and Aphria (APHA) Merger Tilray ( TLRY) and Aphria ( APHA) $4bn merger information including expected completion date, offer price and contact details are displayed in the acquisition details table below. TLRY stock was at $7.87 on Dec. 15, the day before the merger announcement. The news comes one business day after shareholders of the previous version of Tilray voted in favor of the deal. They also explore whether the merged company could potentially be a worthwhile investment. Now, all eyes will be on the TLRY stockholder meeting later this month when the company takes up the merger vote. Aphria has a company called CC Pharma based in Germany, which is very active and quite strong on the German medical marijuana market. In the middle of February, APHA stock was trading at around 0.41x what TLRY was trading at. Tilray changed its bylaws in April to reduce its shareholder vote quorum to one-third of the voting power of the outstanding shares entitled to vote to approve the deal, instead of a majority of the voting power of the outstanding shares. These 3 industries could be completely disrupted by data analytics. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. Were a community for all things stoner from entertainment to guides and smoking accessories, we honor the green goddess. Since th Canopy Growth (NASDAQ: CGC), a top weed stock and leading cannabis producer and distributor has just added a new name to its growing Cannabis stocks have been experiencing an ecstatic high since the final quarter of last year. Personally, Id rather see Aphria go it alone or look to the unnamed company that too approached Aphria about a merger last year. Type a symbol or company name. It was a juicy merger arbitrage opportunity that has since come down. A deviation in stock prices can lead to merger arbitrage. This has led many As the mid-year mark is fast approaching, its not unusual for investors to assess the standing of their portfolio. Although Tilray is down by around 50% year to date, Aphria is up by 72% this year. Written by If the deal goes ahead, the two companies will operate under the Tilray brand with Aphrias current CEO, IrwinD.Simon, leading the new entity. First, Aphria has a distribution business in Germany that accounted for more than half of revenue in the third quarter. According to executives from both Aphria and Tilray, the merger is targeted at cost savings and creating synergy. Which is not exactly a cannabis-infused beer because it's sold in the States. This is why Aphria's merger with Tilray is so critical. All told, nothing here really stands out. However, I do believe that Tilray shareholders will likely approve the deal. 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. That in turn suggests that each Aphria. The new company will trade under Tilrays ticker on the Nasdaq, and Aphria shareholders will own 62% of Tilrays stock under the terms of the transaction, which was characterized as a reverse acquisition of Tilray, the companies said. 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 merger would be subject to regulatory approvals. Ive long been a skeptic toward Tilray, whose growth and revenue base hardly stand out among Canadian players. All Rights Reserved. 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. Create your Watchlist to save your favorite quotes on Nasdaq.com. There will be a chance to buy TLRY cheaper down the road. What does this mean for the marijuana industry at large? You must be 21 years of age or older to view the page. 1125 N. Charles St, Baltimore, MD 21201. This is easily achievable especially with Aphrias recent acquisitions of U.S. craft beer company Sweetwater Brewing. Since then it has more than doubled to $18.36 as of April 29. These symbols will be available throughout the site during your session. The products featured have not been directly evaluated by the US Food and Drug Administration (FDA). The merger will also generally offer the new company access to capital and improved funding. Check your inbox or spam folder to confirm your subscription. Both stocks will, assuming the merger closes, end up in the same place. A worker smiles as she shows cannabis plants at the Tilray factory in Cantanhede, Portugal April . . Thats not cheap, either. Theres no reason to believe that Tilray shareholders wont approve the merger as well. Tilray Marijuana stocks rallied as high as 27% when it announced its agreement to enter into a merger with Aphria just before Christmas. Again, relatively speaking, you're not talking Philip Morris (PM 0.46%) or Exxon (XOM -1.16%) here, these are relatively small companies. This will help reduce their combined losses. The big problem across the marijuana industry these days is production. Against pro forma revenue of $693 million, what will be Tilray looks cheap by sector standards. At the same time, Im not sure its the best deal for Aphria, even if current APHA shareholders will own 62% of the combined company. Learn More. The company says that the "new Tilray" will have synergies of over 100. On December 16, 2020, Tilray (TLRY) and Aphria (APHA) announced a merger that would create the largest marijuana company globally. That equals 632 million in losses (U.S. $505 million). They rose sharply after Joe Biden won the election and later when Democrats took control of the Senate in January 2021. Cannabis legalization is sweeping over North America 15states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018. Are Canadian Pot Stocks Headed for Another Crash? Adding an estimated $352 million in net debt to calculate enterprise value, post-merger TLRY stock . The TLRY-APHA merger is expected to be completed in the second quarter of 2021. quotes delayed at least 15 minutes, all others at least 20 minutes. The weed stock industry continues to shape up positively as newly legalized states open up more expansion opportunities. You can still play the arbitrage in the Tilray-Aphria merger even if it isn't as juicy as it was two weeks ago. Investors in marijuana stocks will also see this as a positive sign for the industry. Net cannabis revenue plunged by nearly one-fourth quarter-over-quarter. Results for the fiscal third quarter (ending Feb. 28) were not promising on that front. Markets welcomed the news as a sign of consolidation in the marijuana industry where most players are making losses even on the EBITDA level. 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. Covid-19 related lockdowns have presented unique challenges across Canadian and German markets. Copyright Yet Aphria is the business that needs to do more of the heavy lifting post-merger. The average analystprice target of C$22.05impliesupsidepotential of about24.6%to current levels. But Aurora Cannabis (NYSE:ACB) is cheaper on that basis and, again, not all of Aphrias revenue is created equal. In a research note, Bottomley told investorsthat while he believesthe companys3Q "signals a number of red flags" that could impact most cannabis operators, he is downgrading Aphriaas the stockis trading at 97% of the impliedtransactionprice with Tilray. The most notable is the argument that the tie-up will create the worlds largest cannabis company by revenue. 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. Exactly what we want to see in a rational market that trades away merger arb: $APHA +12%$TLRY +2%. Aphria (@aphriainc) said 99.38% of its shareholders voted to approve its merger with Tilray (@tilray). This merger can be considered as a light shining at the end of an unpredictable year like 2020. Then and now, Aphria's (now Tilray's) leadership has touted many benefits of the two companies coming together. It would also see the new company instantly offer real competition to established players like Canopy Growth and Aurora Cannabis both in North America and globally. *Average returns of all recommendations since inception. Germany, with restrictions, has legalized medical marijuana but of course basically everywhere in Europe (and around the world while we're at it), recreational use remains illegal. Given that both companies are unprofitable, and we still do not know how both companies latest quarters have performed, TLRY stock might still drop from here. What's happening with the TLRY and APHA merger? Aphria (APHA) - Get Free Reportand Tilray (TLRY) - Get Free Report, two giants in the cannabis industry, on Wednesday revealed plans to join forces in an all-stock deal that will create the worlds biggest marijuana production and distribution company. 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. 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. People may receive compensation for some links to products and services on this website. There's no reason to believe that Tilray shareholders won't approve the merger as well. 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. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. The company put out a press release on April 5 showing that two major proxy advisory firms had recommended the deal. The move was widely expected after Aphria shareholders voted in favor of a deal by a wide margin, with a total of 99.38% of shares voted approving it on April 14. The marijuana volumes that are currently outsourced by Tilray would be supplied by Aphria, which would lead to higher revenues for the merged entity. 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. 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. 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