In an announcement on Monday, Sundial Growers (NASDAQ: SNDL) confirmed that it had entered a purchase agreement with Zenabis Global. This Agreement is in the form of a “stalking horse bid” pursuant to which the shares, business, and assets of the direct and indirect subsidiaries of Zenabis Global Inc. would be acquired by Sundial. The deal will be pursuant to the Companies Creditors Arrangement Act (Canada) (“CCAA”)
The deal will move to the next stage after it has been approved by the Quebec Superior Court supervising the Companies’ Creditors Arrangement Act (CCAA) proceedings. After the court approves the bidding procedures scheduled for July 5, the Bid Agreement will start, with the floor set at a minimum acceptable bid either in a sale or investment solicitation process. This is designed to achieve the highest bid and the best offer for Zenabis Global Inc. and its subsidiaries. Ernst & Young will act as CCAA monitor in the bidding processes.
The CEO of Sundial Growers, Zach George, said, “We are committed to creating continuity for the Zenabis Group’s operations and employees and assisting Zenabis in good faith with its restructuring. This process has just begun, and we will provide more information as it becomes available.”
The assets that the Bid Agreement will cover include the 380,000 square foot indoor growing facility in Atholville, 15,000 kgs of extraction capacity, and New Brunswick with an annual production capacity of around 46,000 kgs of dried cannabis. The facility will be an addition to Sundial as it has an EU GMP certification, which gives it the license to export internationally to Israel, Malta, the UK, and the EU. Zenabis also has a joint venture with ZenPharm Limited, a company based in Malta, allowing for bulk imports into Malta from the facility in Atholville and the exports of finished cannabis products to countries in the United Kingdom and EU.
The Agreement will also cover the acquisition of a decommissioned 255,000sq. ft. indoor facility in Stellarton, Nova Scotia. The facility was a packaging, processing, and value-added cannabis product manufacturing facility.
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