SNDL Completes $37M Nova Cannabis Acquisition, Strengthening Canadian Market Position

SNDL Inc. SNDL announced Monday the completion of its acquisition of Nova Cannabis Inc. NVACF NOVC, securing full ownership by purchasing the remaining 34.8% of shares it did not already hold. The transaction was approved by over two-thirds of Nova shareholders and a majority of disinterested shareholders, enhancing SNDL’s cannabis retail operations efficiency.

Nova Shareholders Cash In On Deal

Under the arrangement, Nova shareholders received $1.75 in cash per share, a 41.2% premium over the 20-day volume-weighted average trading price as of August 12, 2024.

Alternatively, they could opt for 0.58 of a SNDL common share for each Nova share, subject to proration and a maximum of 50% of the total consideration payable in SNDL shares. The majority chose cash, with only a small fraction electing to receive SNDL shares.

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CEO Highlights Cost Savings In Deal

“The acquisition of Nova’s remaining minority interest represents a significant milestone that will streamline SNDL’s cannabis retail operations and generate material savings by eliminating public company expenses,” said Zachary George, CEO of SNDL. He noted that the deal was structured to incentivize shareholders to opt for cash, emphasizing efficient capital deployment without significant share dilution.

Nova Shares Set For Delisting, SNDL Appoints New Board Member

Following the acquisition, Nova’s shares are expected to be delisted from the Toronto Stock Exchange and OTC Markets. Moreover, Nova plans to cease being a reporting issuer in Canada, after which SNDL intends to amalgamate with Nova under Alberta’s Business Corporations Act.

Read Also: Nova Cannabis Shareholders Approve SNDL Acquisition: What This Means For Investors

In conjunction with the deal, SNDL will appoint J. Carlo Cannell, a seasoned practitioner of “special situations” since 1992, to its board of directors. This move aligns with SNDL’s strategic expansion and governance enhancement.

SNDL Strengthens Position And Prepares For Growth

For investors, SNDL’s acquisition of Nova consolidates its position in the Canadian cannabis retail market, optimizing operations and reducing costs. By eliminating public company expenses and strengthening its cash position, SNDL is better equipped for growth, making it a more efficient player in an increasingly competitive industry—potentially boosting shareholder value in the long term.

Registered Nova shareholders are advised to submit their documents promptly to receive their consideration under the arrangement. Legal counsel for SNDL was provided by McCarthy Tétrault LLP, while Nova was advised by Eight Capital and Bennett Jones LLP.

SNDL Price Action
SNDL’s shares were trading -1.24% lower at $2.00 per share at the time of this writing around 11:30 AM ET Monday.

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