Organigram Holdings Inc. (NASDAQ:OGI) (TSX:OGI) announced the acquisition of 100% of Motif Labs Ltd. for CA$90 million ($64 million), comprising of CA$50 million in cash and CA$40 million in Organigram common shares, based on a 30-day trading VWAP of $2.321 on the TSX.
An additional CA$10 million contingent consideration is payable in shares, conditional on achieving a share price above $3.2203 within 12 months.
The deal is financed through Organigram's cash reserves.
Why It Matters
The company said the move positions Organigram as Canada’s largest cannabis company by market share (12.4%), being among the top companies within the vape and infused pre-roll categories.
The deal also enhances Organigram's capabilities and expands its presence nationwide, positioning it for international growth as cannabis regulations evolve globally.
Read Also: Organigram Reports 25% YoY Increase In Q3 Net Revenue, Significant Improvement In Adjusted EBITDA
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"The highly complementary acquisition of Motif establishes Organigram as Canada's largest cannabis company by market share and accelerates our vision to be a leading cannabis company across all major categories, driven by a relentless focus on the consumer of today and tomorrow," said CEO Beena Goldenberg. "Winning in Canada, the world's largest federally legal recreational market, supported by leading brands and best-in-class operations, innovation and product development, provides the platform to unlock global opportunities as evolving attitudes towards cannabis drive regulatory changes in new and exciting markets."
Motif is holding a 21.2% share in vapes and 9.4% in infused pre-rolls. The company is known for its innovation, increasing net revenue from $35 million in 2022 to $79 million in 2023 and delivering 15 consecutive quarters of positive adjusted EBITDA.
The deal is expected to drive economies of scale and cost synergies – estimated at $10 million over two years, while improving financial performance.
Motif's facilities in Aylmer and London add advanced extraction and manufacturing capabilities to Organigram's operations, enhancing its production capacity and providing a strategic distribution hub.
"This deal is about a leading public cannabis company joining forces with Canada's top private licensed producer," Paolo De Luca, the company's chief strategy officer, said. "We are extremely excited about leveraging our combined competitive advantages and respective market positions to continue to grow in Canada and beyond."
Read Next:
- Canada’s Cannabis Market Goes Cold, Pot Prices Hit Bottom: Why Top Producers Are Losing Ground
OGI Price Action
Organigram's shares traded 9.66% higher at $1.59 per share at the time of writing on Friday.
