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Aphria Closes $76 Million Investment From an Unidentified Investor

By Eric Volkman - Jan 31, 2020 at 5:21PM

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This as-yet-unnamed "Significant Investor" could evenually wind up with a more than 7% stake in the cannabis company.

Canadian cannabis giant Aphria (APHA) revealed Friday that it has a new major shareholder. The catch is, the public has no idea what or who it is.

The company announced in a press release that it closed a previously announced deal for the entry of this so-called "Significant Investor." It has paid 100 million Canadian dollars ($76 million) for slightly more than 14 million units of Aphria at a price of CA$7.12 ($5.39) per unit.

One unit comprises a single share of Aphria's common stock, plus a warrant for another half-share. Each full-share warrant gives the holder the right to buy one share of stock at a price of CA$9.26 ($7.01), within two years of the deal's closing date. All told, then, this unnamed entity could end up owning in excess of 21 million shares of Aphria. Prior to this deal closing, the company had nearly 253 million shares outstanding, according to Yahoo! Finance.

Marijuana bud with Canadian flag in the background.

Image source: Getty Images

When originally announcing the deal, Aprhia said it would utilize the funds from the Significant Investor to expand its international footprint, working capital, and  for general corporate purposes.

With those new funds, Aphria will have nearly CA$600 million ($454 million) in cash in its coffers, which improves the health of its balance sheet significantly. The company's indebtedness was already low as of the end of its most recently reported quarter.In the press release, Aphria said that the deal "reinforces confidence in our business and management team."

On Friday, a bearish day for equities in general, Aphria's shares fell by a bit over 3%. That performance was roughly in line with many of its marijuana stock peers.

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