09 February 2024 | Friday | News
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MedReleaf Australia, holding the coveted #2 spot in the rapidly growing Australian medical cannabis market, was acquired by Aurora in a transaction valued at AUD$50 million. This acquisition marks Aurora's continued commitment to investing in markets with sustainable and profitable growth opportunities.
Australia's medical cannabis market, estimated to be worth approximately AUD$400 million, operates under a clinician-led distribution model, aligning perfectly with Aurora's operational success in other key global medical cannabis markets such as Germany. Since initially partnering with MedReleaf Australia in 2017, Aurora has played a pivotal role in the region's burgeoning growth, leveraging its pharmaceutical-grade cultivation and innovative product development.
Miguel Martin, Chief Executive Officer of Aurora Cannabis, expressed his enthusiasm for the acquisition, stating, "The acquisition of MedReleaf Australia represents a strategic milestone in Aurora's global cannabis leadership. We are excited to solidify our position in this rapidly growing market and accelerate our plans to deliver positive free cash flow in calendar 2024."
The co-founders of MedReleaf Australia, Russell Harding and Nathan Davis, echoed Martin's sentiments, expressing pride in the company's growth and the positive impact it has had on patients' lives nationwide. They see the acquisition as a significant step in MedReleaf Australia's ongoing expansion and its mission to integrate medical cannabis into mainstream medicine.
The acquisition of MedReleaf Australia is expected to bolster Aurora's global cannabis leadership, leveraging its strength in providing pharmaceutical-grade cannabis products and expanding margins in the Australian market. With MedReleaf Australia generating approximately AUD$40 million in net revenue over the trailing 12 months, Aurora anticipates immediate accretive effects from the transaction, supporting its path to profitability and positive free cash flow in calendar 2024.
Transaction Details: Aurora, through its wholly-owned subsidiary, acquired approximately 90% equity interest in MedReleaf Australia at a total enterprise value of AUD$50 million. The consideration includes approximately 69.5 million Aurora Shares issued to selling shareholders and AUD$9.45 million in cash. Certain portions of the consideration are held in escrow to ensure the fulfillment of obligations by the selling shareholders.