Tilray to buy rival HEXO's debt for up to $211 million $

HEXO, a Quebec-based cannabis producer, has announced that it has finalized a strategic partnership with Tilray, a Canadian producer, which includes the purchase of up to $211 million in debt, in exchange for Tilray acquiring a significant stake in its struggling rival.

According to HEXO, the terms of the agreement are favorable to the company, and will enable it to strengthen its balance sheet and increase its market share.’accelerate your transformation into a profitable business over the next year.

The new partnership also brings together two major leaders in the cannabis market in Canada, and should create economies of scale of up to C$50 million within two years, to be shared equally between HEXO and Tilray.

«My main priority since arriving in November has been to redress a very difficult balance sheet due to the convertible notes that had previously been put in place, and today, after an exhaustive search for alternatives, we are announcing the most optimal deal to strengthen our balance sheet, preserve shareholder value and provide HEXO with the capital needed to execute our plan. The Path Forward« said Scott Cooper, President and CEO of HEXO.

«This strategic alliance will help reduce our costs, preserve our independence and we look forward to concluding a definitive agreement shortly.»

«We believe this transaction would be a win-win for Tilray and HEXO, as it would launch a strategic partnership between two leading Canadian cannabis producers with complementary brand portfolios. For us, it paves the way for a significant future stake in HEXO, and allows us to participate in HEXO's share price appreciation as it continues to implement its growth initiatives,» said Irwin D. Simon, President and CEO of Tilray.

Last year, HEXO had expressed its concerns regarding its convertible note issue, and had indicated that it might not have sufficient liquidity to repay its debt.