Aurora Cannabis Inc., the Canadian company defining the future of cannabinoids worldwide, is pleased to announce that a wholly-owned subsidiary of the Company has acquired a controlling interest in Bevo Agtech Inc. (“Bevo”), the sole parent of Bevo Farms Ltd., one of the largest suppliers of propagated vegetables and ornamental plants in North America (the “Bevo Transaction”). Concurrent with closing of the Bevo Transaction, Bevo entered into an agreement to acquire the Company’s Aurora Sky facility in Edmonton, Alberta through the acquisition of one of Aurora’s wholly-owned subsidiaries (the “Aurora Sky Transaction” and together with the Bevo Transaction, the “Transaction”).
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The Transaction allows Aurora to immediately benefit from a profitable, cash flow positive and growing business, and may have the potential to drive long term value to Aurora’s existing cannabis business via the application of Bevo’s industry leading plant propagation expertise. Aurora, through its wholly-owned subsidiary, will acquire 50.1% of Bevo’s outstanding common shares, take a controlling position on Bevo’s board of directors and financially consolidate Bevo. Bevo’s experienced management team are to remain significant shareholders and stay in place to embark on a robust growth plan, including the use of the Aurora Sky facility for orchid cultivation and vegetable propagation.
Founded in 1986, Bevo operates 63 acres of greenhouse in British Columbia, Canada; is led by a management team with over 85 years of agricultural experience, and supplies greenhouses, nurseries, field farms and wholesalers. Bevo has consistently demonstrated growth in revenue and earnings over the past decade through process improvements and facility expansions. For the twelve months ended June 30, 2022, Bevo has achieved revenues of $39 million and Adjusted EBITDA of $9 million (excluding non-recurring rental revenue). Bevo’s business exhibits seasonality driven by agricultural grow cycles, with the strongest financial period being from January to June.
“This investment once again demonstrates our disciplined capital allocation approach and is consistent with both our short term needs and long-term vision to be the leading global cannabis company. Bevo’s track record in generating not only positive Adjusted EBITDA but free cash flow, world class propagation expertise, and established distribution networks in Canada and the United States makes them an ideal strategic partner,” said Miguel Martin, Chief Executive Officer of Aurora. “We expect this investment and collaboration between industry leaders will drive significant shareholder value and synergies for both parties. We are also excited about Bevo repurposing Aurora Sky and the potential to expand the scale and scope of their business and saving significant costs previously expected in connection with the wind down and sale of the facility”.