*Note: All references to dollar values refer to Canadian dollars unless otherwise noted
Proposed Transaction
Under the terms of the Arrangement, shareholders of Liberty will receive 0.03683 of a subordinate voting share or restricted voting share for each Liberty Share held (the "Exchange Ratio"), subject to adjustment described below. The Exchange Ratio implies a price per Liberty Share of approximately
Transaction Highlights
- Significant premium being offered to Liberty Shareholders of approximately 94% and representing an implied offer price of approximately
$1.05 per share1 - Transaction structure offers Liberty shareholders full upside participation to the closing date, providing the opportunity to benefit from any additional upside in
Ayr's stock price, which continues to trade at a significant discount to its peers despite appreciating +400% since the peak of COVID-19 on the back of strong financial performance and execution and strongU.S. cannabis tailwinds - The Transaction structure provides meaningful downside protection against a potential decline in
Ayr's share price up to the closing of the Transaction - Liberty shareholders are expected to hold approximately 20% ownership in the pro forma entity (on a fully-diluted in-the-money basis)(1)(2), providing the opportunity to participate in the expected value created through the Transaction
- The combined company will bolster a geographical footprint with operations in attractive limited license and highly populated states including
Nevada ,Massachusetts ,Florida ,Pennsylvania ,Arizona ,Ohio andNew Jersey 3, and positionsAyr as a top-tierU.S. multi-state operator ("MSO") - The Transaction provides
Ayr a strong entry into a key new market with an already established asset base, including a 300,000 sq. ft. state of the art cultivation facility and 28 dispensaries in key locations acrossFlorida - Liberty and its shareholders will immediately benefit from enhanced size, scale and capital markets presence as part of a large
U.S. MSO to accelerate its growth and increase market share inFlorida - Opportunity to leverage the combined experience and expertise of
Ayr and Liberty to further drive operational improvements for the pro forma company Ayr expects to retain all 335 employees of Liberty as part of the Transaction- Shareholders of Liberty, holding approximately 29% of the outstanding common shares, have agreed to support the Transaction
Liberty Operational Update:
As previously announced on
The Company continues to make strong progress on its greenhouse expansion project and successfully completed its full first harvest of Seed JunkyTM strains at one of the Company's recently retrofitted, 20,000 square foot greenhouses. The harvest of Seed JunkyTM strains saw a nearly four-times multiple on dry yields compared to Liberty's historical harvests, and the premium product arrived at the Company's dispensaries in early November. The improvement in flower yields is expected to significantly enhance product availability at Liberty dispensaries and will provide our customers with some of the highest quality, high-potency dried flower available in all of
On the manufacturing and product formulation side, Liberty also recently launched its ethanol extraction capabilities, which has significantly increased its oil production and is expected to allow the Company to introduce new concentrate products to the market. Furthermore, Liberty is currently in the process of obtaining regulatory approvals for its edibles kitchen. The new concentrate and edible products are expected to launch in early 2021.
Management Commentary:
"This transaction is a win-win-win for Liberty's patients, shareholders, and stakeholders. With the support from
"We are thrilled be entering the rapidly growing and robust
Terms of the Transaction:
The Transaction will be effected by way of plan of arrangement under the Business Corporations Act (
- if the 20-day volume weighted average price ("20D VWAP") of Ayr Shares immediately preceding the 3rd business day prior to the closing of the Transaction (the "Ayr Closing Price") is below
$27.15 but greater than or equal to$23.08 , the Exchange Ratio will be calculated as$1.00 divided by the Ayr Closing Price; and - if the Ayr Closing Price is less than
$23.08 , the Exchange Ratio will be fixed at 0.0433
The Exchange Ratio implies a price per Liberty Share of approximately
After giving effect to the Transaction, Liberty Shareholders will hold approximately 20% ownership in the pro forma entity (on a pro forma fully-diluted in-the-money basis)1,2.
Upon completion of the Transaction, Liberty will nominate one (1) independent director to serve on the board of directors of
The Transaction has been unanimously approved by the board of directors of each of Liberty and
The Agreement contains customary representations, warranties and covenants for transactions of this nature, including a termination fee of
The Transaction is subject to, among other things, the approval of Liberty shareholders at a special meeting (the "Special Meeting"), receipt of required all applicable CSE, regulatory and court approvals, and other customary conditions of closing. Approval of
The board of directors of Liberty unanimously recommends that Liberty shareholders vote in favour of the resolution to approve the Transaction at the Special Meeting.
The board of directors of Liberty has obtained fairness opinions from each of
Ayr Pro Forma Footprint
Upon completion of the Transaction and
Financial and
Conference Call & Investor Presentation
Conference Call Date:
Time:
Toll-free dial-in number: (800) 319-4610
International dial-in number: (604) 638-5340
Conference ID: None needed
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.
The conference call will be broadcast live and available for replay here.
A telephonic replay of the conference call will also be available through
Toll-free replay number: (855) 699-9658
International replay number: (412) 317-0088
Replay ID: 5857
An investor presentation providing an overview of the Transaction will be made available on each of Liberty's and
About
About
Forward-Looking Statements:
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains certain forward-looking statements within the meaning of applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expect", "believe", "plan", "pro forma", "intend" or the negative of these terms and similar expressions. Forward-looking statements in this news release include, but are not limited to, expectations related to Liberty and
__________________________________
1 Based on the closing price of the Liberty Shares and Ayr Shares on the Canadian Securities Exchange ("CSE") as of
2 Estimated pro forma ownership is inclusive of shares to be issued relating to previously disclosed
3 Inclusive of pending acquisitions previously disclosed by
View original content to download multimedia:http://www.prnewswire.com/news-releases/liberty-health-sciences-announces-strategic-acquisition-by-ayr-strategies-unlocking-significant-value-for-shareholders-301197488.html
SOURCE
© Canada Newswire, source