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VANCOUVER, British Columbia, Sept. 25, 2019 (GLOBE NEWSWIRE) -- Auxly Cannabis Group Inc. (TSX.V: XLY) (OTCQX: CBWTF) (“Auxly” or the “Company”) today announced that its transaction (the “Transaction”) with Imperial Brands PLC (“Imperial Brands”) has closed. As announced on July 25, 2019, Imperial Brands invested C$123 million by way of a debenture pursuant to the Transaction, which is convertible into 19.9% ownership of Auxly. Imperial Brands grants Auxly global licenses to its vaping technology, access to its vapor innovation business, Nerudia, and will use Auxly as its exclusive partner for the future development, manufacture, commercialization, sale and distribution of cannabis products of any kind anywhere in the world.
“We are delighted to announce the closing of this transaction to formally mark the start of our strategic partnership with Imperial Brands,” said Hugo Alves, Chief Executive Officer of Auxly. “We believe there is considerable opportunity for growth and value creation for both companies. We are looking forward to working with the incredibly strong team at Imperial Brands as we prepare to launch our portfolio of branded derivative products, formulated and manufactured at our subsidiary, Dosecann, later this year. We welcome Imperial Brands' experience and expertise on our Board and on our Safety Committee to help ensure that all of our branded products are produced to Dosecann's exacting standards of quality, safety and efficacy and earn the trust of Canadian consumers."
In connection with the closing of the Transaction, Auxly’s Board has added Conrad Tate as a new director and John Downing as a non-voting observer. They join Auxly’s existing directors: Chuck Rifici; Hugo Alves; Troy Grant; and Genevieve Young.
Conrad Tate, Corporate Development Director, Imperial Brands
Conrad joined Imperial Brands in 1998 having previously worked for a large regional law firm. He has held a number of senior legal and commercial roles in the business and was appointed Corporate Development Director in 2010. Conrad has played a key role in a number of significant transactions over the years, including the acquisition of Altadis, Commonwealth Brands, assets purchased by Imperial as part of the Reynolds American takeover of Lorillard and Nerudia. He has led Imperial Brands’ investigation, analysis and entry into the legal cannabis sector and is currently leading a major divestment program for Imperial Brands, which will realize proceeds of up to £2 billion.
John Downing, Company Secretary, Imperial Brands
John, a qualified solicitor, joined Imperial Brands in 2005 having previously worked for the law firm Linklaters. He has had a number of senior legal roles in Imperial Brands including playing a leading role in the Altadis acquisition and becoming Head of Group Legal in 2010. He has considerable experience in managing key corporate projects related to financing, business development and other commercial matters. In addition to his Group Company Secretary role at Imperial Brands, John also has responsibility for the Group’s governance, Code of Conduct, security and information security.
“I’m thrilled to be closing this transaction with Auxly, a dynamic, highly skilled organization that has all the ingredients required for delivering success in the branded derivatives market and beyond,” said Conrad Tate, Corporate Development Director, Imperial Brands. “We’re excited by the opportunities this partnership offers and look forward to working with Auxly to build its business and realize its significant future growth potential.”
ON BEHALF OF THE BOARD
"Hugo Alves" CEO
About Auxly Cannabis Group Inc. (TSX.V: XLY)
Auxly is an international cannabis company dedicated to bringing innovative, effective, and high-quality cannabis products to the medical, wellness and adult-use markets. Auxly's experienced team of industry first-movers and enterprising visionaries has secured a diversified supply of raw cannabis, strong clinical, scientific and operating capabilities, and leading product research and development infrastructure in order to create trusted products and brands in an expanding global market.
Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.
About Imperial Brands
Imperial Brands is an international fast-moving consumer goods company that continually evolves to embrace changing market dynamics and develop new consumer experiences. Its Next Generation Products prioritizes the fast-growing vapor segment with innovative products and proprietary technologies, including its pioneering brand, blu.
Auxly Investor Relations:
For further information, please contact our Investor Relations Team:
Email: [email protected]
Auxly Media Enquiries (only):
For media enquiries or to set up an interview please contact:
Sarah Bain, VP External Affairs
Email: [email protected]
This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: anticipated use of proceeds, Auxly's execution of its innovative product development and commercialization strategy, the anticipated benefits of the Transaction and the strategic relationship with Imperial Brands, future legislative and regulatory developments involving cannabis and cannabis products, political change in Canada and globally, competition and other risks affecting Auxly in particular and the cannabis industry generally.
A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking information in this release including, but not limited to: the risk that synergies and expected collaboration from the transaction may not be fully realized or may take longer to realize than expected; consumer demand for cannabis products in Canada and globally; Auxly's subsidiaries and partners are able to obtain and maintain the necessary regulatory authorizations to conduct business; and general economic, financial market, legislative, regulatory, competitive and political conditions in which Auxly and its subsidiaries and partners operate will remain the same. Additional risk factors are disclosed in the revised annual information form of Auxly for the financial year ended December 31, 2017 dated May 24, 2018.
New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on Auxly's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information. The forward-looking information in this release is based on information currently available and what management believes are reasonable assumptions. Forward-looking information speaks only to such assumptions as of the date of this release. In addition, this release may contain forward-looking information attributed to third party industry sources, the accuracy of which has not been verified by Auxly. Readers should not place undue reliance on forward-looking information contained in this release.
The forward-looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, Auxly does not undertake any obligation to publicly update or revise any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Auxly’s head office is located at 1055 West Hastings Street, Suite 2200, Vancouver, BC V6E 2E9. Imperial Brand’s head office is located at 121 Winterstoke Road, Bristol, UK BS3 2LL.
An affiliate of Imperial Brands acquired the convertible debenture and assuming the convertible debenture is exercised in full as of the date hereof, Imperial Brands and its affiliates would have beneficial ownership of 151,668,018 common shares of Auxly (approximately 19.99% of the issued and outstanding common shares calculated on a non-diluted basis).
Imperial Brands entered into the subscription agreement as part of a strategic investment in Auxly. Imperial Brands intends to review its investment in the Corporation on a continuing basis and may, subject to the terms of the Transaction agreements, purchase or sell common shares, either on the open market or in private transactions, or exercise the convertible debenture in the future, in each case, depending on a number of factors, including general market and economic conditions and other factors and conditions Imperial Brands deems appropriate.
An amended early warning report will be filed by Imperial Brands with applicable Canadian securities regulatory authorities. To obtain a copy of the early warning report, please contact Daniel Glavin at 416-869-5500.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.