Canopy Rivers said it is completing a reverse takeover with AIM2 Ventures and separately said it is raising $60 million ahead of an eventual public listing.
As part of the deal, Canopy will take over AIM2 Ventures, which trades on the TSX Venture Exchange under the ticker symbol “AIMB.P.”
Canopy Rivers, which was formed just over a year ago on April 26, 2017, will use its investment and operating expertise to look for additional opportunities in the cannabis sector, the company said in a statement.
Canopy Rivers is closely aligned with Canopy Growth, which trades on the NYSE under the ticker symbol CGC, is “managed by an experienced team of qualified financial and technical professionals with significant industry experience and relationship networks.”
Voting Rights Protected
According to the company statement, the Canopy Rivers Subordinated Voting Shares and the Canopy Rivers Multiple Voting Shares held by Canopy Growth represent approximately 29.15% of the issued and outstanding Canopy Rivers shares and approximately 88.01% of the votes attached to all of the issued and outstanding Canopy Rivers shares (on a non-diluted basis).
The deal is being structured as a three-part amalgamation, where AIM2 will combine with Canopy to become a new company. Class B shareholders of Canopy will receive one new share in AIM2 subordinated voting shares and Class A shareholders of Canopy will get one new AIM2 Multiple Voting Shares. In addition, the companies said “each Canopy Rivers stock option and each Canopy Rivers warrant will be exchanged for an AIM2 stock option or AIM2 warrant, as applicable, on substantially the same terms and conditions.”
After the deal is completed, AIM2 will be the parent company and then change its name to Canopy Rivers. Canopy Rivers, which was formed just over a year ago and has quickly expanded into investment areas such as licensed producers, late-stage applicants and technology/media platforms, will replace the existing officers and directors.
In addition to the aforementioned investments, Canopy also has investments in branded developers and has made investments in a variety of securities, including equity, debt, royalty and profit sharing agreements, the companies noted in the statement.
It’s expected that the new board of directors for the combined company will be Canopy Growth’s Bruce Linton (CEO), Eddie Lucarelli (the new CFO and formerly of TD Securities), Olivier Dufourmantelle (COO) and several others. The entire list can be found here.
The deal is subject to conditions, including the parties entering into an agreement on or before July 15. It’s also subject to other conditions, including shareholder and regulatory approval.
Trading AIM2 shares will be halted until the deal has been reviewed by the TSXV and it’s not expected they will resume trading after the deal is closed.
Additionally, Canopy said it entered into a deal with CIBC Capital Markets and GMP Securities to sell $60 million worth of itself in a private placement.
The offering is expected to close on July 5, 2018.