Please ensure Javascript is enabled for purposes of website accessibility

Aurora Cannabis Acquisition of Reliva Closes

By Eric Volkman – Updated May 29, 2020 at 9:40AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The news comes only days after the deal was originally announced.

Aurora Cannabis' (ACB -2.92%) latest asset buy is in the books. The company announced on Thursday that its purchase of Reliva, a maker of hemp-derived cannabidiol (CBD) products, has closed.

The news comes just over a week after Aurora divulged that it and Reliva had agreed to the acquisition. The basic terms of the deal are that Aurora is to pay $40 million in common stock for Reliva, with potentially as much as $45 million more if the latter hits certain financial incentives across the following two years. Those additional monies, if earned, will be paid either in cash, stock, or a combination of the two.

A field of hemp.

A field of hemp, which provides the CBD for Reliva's products. Image source: Getty Images.

This is lightning-fast for the marijuana industry, in which acquisitions have often taken (and are taking) many months to close. 

Since Reliva was a privately held company before being absorbed into Aurora, it did not make its finances public. According to an article on MarketWatch, it books $13 million to $14 million in revenue per year. Aurora did say that its new asset "is expected to be Adjusted EBITDA accretive to Aurora shareholders in fiscal 2020 and fiscal 2021." No mention was made of Reliva's net profit or loss.

The impetus behind the marijuana company's purchase is to gain a major CBD asset based in the huge U.S. market (Aurora is headquartered in Canada). The company said Reliva's products are sold in more than 20,000 retail locations and online. It added that Reliva has contracts with a host of retailers in the U.S., including eight of the country's top 20 convenience store operators.

The news of the deal's closure helped lift Aurora shares on Thursday. In contrast to the declines of the major stock indexes, they increased by nearly 0.3% on the day.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Aurora Cannabis Stock Quote
Aurora Cannabis
ACB
$1.17 (-2.92%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.