H2 is currently completing a state-of-the-art, purpose-built 48,000 square foot cannabis production facility, less than an hour from Montreal (the "Lachute Facility"), and near the Pierre-Elliott Trudeau International Airport. Upon completion, which is anticipated before the end of 2017, the Lachute Facility is projected to produce approximately 4,500 kilograms of high-quality cannabis per annum.
The facility is located on 46 acres (19 hectares) of land (the "Property"), which H2 has the right to acquire for $136,000. The Property has access to ample low-cost power, water and infrastructure to support a very significant capacity expansion -- up to or beyond the scale of the Company's 800,000 square foot Aurora Sky facility, currently under construction at Edmonton International Airport.
The latest Aurora acquisition will be the Company's fourth production facility in Canada - and second site in Quebec, in addition to its 40,000 square foot production "Aurora Vie" facility in Pointe-Claire, on the island of Montreal.
"This is another outstanding transaction that further extends Aurora's lead in establishing advanced-technology, ultra-efficient, low-cost production via purpose-built facilities," said Terry Booth, CEO. "The Lachute Facility, which is 80% complete and has the land and utilities required for significant additional expansion, is fully consistent with the Aurora Standard, and will be instrumental in delivering high quality products for the Quebec, Canadian and overseas markets.
Our participation in the final design and construction of H2's purpose built facility will allow us to leverage our experience, technology, and systems to improve performance and yields beyond the original design. Our recent acquisition of Larssen Ltd. and the formation of Aurora Larssen Projects will play an instrumental role in this respect, and we look forward to a rapid completion of this project in line with the exceptional execution we have shown at Aurora Vie, our other Quebec project."
A central fact of the domestic and global emerging markets is the enormous excess of demand over supply for legal, regulated cannabis products. By leveraging our powerful cash position and excellent liquidity, as well as our experience building the most technologically advanced cannabis facilities, Aurora has a unique ability to acquire top-notch production and distribution assets at attractive valuations, thereby rapidly expanding capacity to meet surging Canadian and global demand."
André Jerome, CEO of H2, added, "We are proud to be joining forces with Aurora, a trail blazer in Canada and around the world in shaping the legal cannabis industry. With the backing of Aurora's operational and cultivation know-how, technological innovation and financial strength, we are confident the Lachute site will be a showcase cannabis production facility, and an important asset in the Company's execution of its domestic and international growth strategy."
Aurora Cannabis Announces Two Acquisitions
Everything west of this line is the richest, most expensive real estate in the world... Aurora Cannabis Inc. (TSX:ACB) continued its quest for world domination on Thursday. They began by purchasing greenhouse design firm Larssen Ltd. and closed the day with the purchase of medical marijuana applicant H2 Biopharma Inc., the latter of which cost Aurora upwards of $25 million. The buys were not unrelated as Larssen will now finish the design of H2's cannabis production facility. That project is almost 80 percent complete.
In a statement, Aurora said that H2 is a late-stage licensee applicant for medical marijuana. Plans for the new facility include the production of up to 4,500 kilograms of cannabis per year, with room for expansion. As for Larssen, their clientele already comprises 15 cannabis industry clients across the globe, all which Aurora will reassess once they finish the buyout.
"We're going to certainly encourage those to proceed but we're going to require some level of partnership, whether that be an equity stake or a supply agreement or other things," executive vice-president of Aurora Cam Battley said in a statement.
Aurora Cannabis Inc.'s all-stock hostile takeover bid of medical marijuana company CanniMed Therapeutics has the backing of a Toronto-based investment manager, two Saskatchewan venture capital funds, and an investment fund also based in the prairie province, according to regulatory filings.
Shares of Aurora (TSX:ACB) were up as much as 16 per cent in late afternoon trading after the Vancouver-headquartered marijuana producer officially launched its bid on Friday, while shares of CanniMed (TSX:CMED) slipped as much as 3 per cent by early afternoon in Toronto.
Aurora signed lock-up agreements with four CanniMed shareholders — which comprise 38 per cent of outstanding shares — on Nov. 13 to support its unsolicited takeover bid, one day before it made its proposal public, according to a circular outlining its offer.
These four institutional shareholders are Golden Opportunities Fund Inc. with a 17.33 per cent stake, Saskworks Venture Fund Inc. with 8.42 per cent, Apex Investment Limited Partnership with 3.48 per cent and Toronto's Vantage Asset Management holding 8.71 per cent, filings show.
Thomas Larssen, the principal of Larssen, will serve as President of ALPS and will continue to oversee Aurora's cultivation infrastructure expansion. Management anticipates that the growth of ALPS will be driven by the continued rapid evolution of the cannabis industry in Canada and around the globe.
"The acquisition of Larssen is an immediately accretive, high-margin revenue generating opportunity that also extends our technological leadership in the cannabis sector," said Terry Booth, CEO. "We know Thomas and his team very well, as they have been instrumental in the design and engineering of our revolutionary Aurora Sky facility. This will help make the integration of Larssen with Aurora seamless. The establishment of ALPS will add significant capacity to our project execution team, enabling us to further accelerate the expansion of our global presence. I look forward to working with Thomas and his team as we pursue new opportunities going forward."
Differentiating transaction with strong strategic rationale
For fiscal 2018 (the 12-month period ending September 30, 2018), Larssen is on pace to generate approximately $6 million in revenues, with an EBITDA margin exceeding 40%.
Through direct ownership and providing a stronger supportive infrastructure, Larssen will be able to dedicate additional resources to developing unique technologies exclusively for Aurora, further extending the Company's industry-leading innovation track record;
Given Larssen's reputation and visibility within the industry, Aurora will gain immediate access to an expanded universe of international M&A and partnership opportunities;
Aurora is executing on an aggressive expansion strategy that is likely to include further construction projects. Through Larssen, the Company will have secured direct access to the services of the world's pre-eminent turn-key project team in the cannabis sector, enabling management to focus on growing Aurora rather than allocating significant resources to project management, as well as save considerable project-related expenses going forward.
Thomas Larssen, Principal of Larssen, added, "We have been at the cutting edge of greenhouse development for over 30 years, and have never encountered a team that matches the vision, entrepreneurship and execution as demonstrated by the people at Aurora. Our decision to join forces with Aurora in this evolving industry was not difficult. Joining the Company will allow us to leverage the incredible brand recognition Aurora enjoys, both within and outside of the cannabis sector. I believe that the resources, infrastructure and strategic support available at Aurora will help establish ALPS as the world's leading horticultural engineering venture, and I look forward to making my contribution to the continued rapid expansion of the Company."
