Curaleaf mounts hostile takeover bid for Aurora Cannabis at roughly $272 million
NEW YORK, Aug. 14. An approximately $272 million hostile bid for Aurora Cannabis (NASDAQ: ACB) became public after Curaleaf Holdings (OTC: CURLF) said its Canadian target refused to negotiate. The US multi-state operator disclosed it had been pursuing Aurora for more than a month before going public with the offer. "To date, Aurora has been unwilling to engage in constructive discussions," Curaleaf said in a press release.
Key takeaways
- Curaleaf Holdings launched an approximately $272 million hostile takeover bid for Aurora Cannabis after Aurora refused to negotiate.
- Curaleaf pursued Aurora for more than a month before making the offer public and says Aurora has been unwilling to engage in constructive discussions.
- The primary draw is Aurora's European position, including more than 50 tons of annual EU-GMP cultivation and manufacturing capacity.
- Curaleaf estimates $40 million in annual cost savings and says the merged entity would have posted $1.5 billion in revenue and $350 million in adjusted EBITDA over the trailing twelve months.
- Aurora has not accepted the offer.
NEW YORK, Aug. 14. An approximately $272 million hostile bid for Aurora Cannabis (NASDAQ: ACB) became public after Curaleaf Holdings (OTC: CURLF) said its Canadian target refused to negotiate. The US multi-state operator disclosed it had been pursuing Aurora for more than a month before going public with the offer. "To date, Aurora has been unwilling to engage in constructive discussions," Curaleaf said in a press release.
What Curaleaf is buying
Aurora has been a prominent name in the Canadian cannabis market, but Curaleaf's interest does not lie there. Canada's cannabis sector is saturated and competitive, with thin margins that have made sustained profitability difficult for producers across the industry. Aurora's stock has fallen 95% over five years on the back of persistent losses and limited revenue growth.
The draw is Aurora's European manufacturing position. Aurora holds more than 50 tons of annual EU-GMP cultivation and manufacturing capacity, according to the press release. EU-GMP certification is the regulatory gatekeeper for European medical cannabis markets, and certified production capacity of that scale is not assembled quickly. Curaleaf already runs three EU-GMP certified facilities and has been pushing into international markets. The combined certified footprint would be larger than either company holds independently.
Curaleaf estimates $40 million in annual cost savings from the combination, the company said. The merged entity, Curaleaf calculated, would have posted $1.5 billion in revenue and $350 million in adjusted EBITDA over the trailing twelve months.
The physical arithmetic
Those projections carry a gap the warehouses have not yet closed. Curaleaf's numbers do not specify the current utilization rate of Aurora's EU-GMP facilities or the margins that certified production is generating today. A buyer paying for certified tonnage is pricing future throughput rather than verified output. Whether Aurora's European operations are running at volumes consistent with the combined EBITDA projection remains undisclosed.
Curaleaf's own shares have declined 73% over five years, a drop the company links to stalled US cannabis legalization.
Aurora has not accepted the offer.