Mr. Bruce Linton reports
CONSTELLATION BRANDS' $5 BILLION CAD ($4 BILLION USD) INVESTMENT IN CANOPY GROWTH CLOSES FOLLOWING SHAREHOLDER AND CANADIAN GOVERNMENT APPROVAL
Constellation Brands Inc. has completed its $5-billion investment in Canopy Growth Corp., which was previously announced on Aug. 15, 2018. The transaction was approved by an overwhelming majority of Canopy Growth shareholders and has been granted all required regulatory approvals, including by the Canadian government under the Investment Canada Act.
This investment provides Canopy Growth with significant financing needed to build scale in the more than 30 countries currently pursuing federally permissible medical cannabis programs, while establishing the foundation needed to supply new recreational adult-use markets as cannabis becomes legal in markets around the world.
"We're excited to expand our strategic partnership with Canopy Growth and to begin helping them build the global scale needed to win long term," said Rob Sands, chief executive officer, Constellation Brands. "The global cannabis market presents a significant growth opportunity and Canopy Growth is well positioned to establish a strong leadership position in this fast-evolving category."
With this investment, Constellation Brands increases its ownership interest in Canopy Growth to approximately 37 per cent of outstanding common shares of Canopy Growth and has appointed two members of its executive team, as well as two independent directors, to the board of directors of Canopy Growth. Constellation estimates the interest expense associated with this transaction to approximately $55-million before tax with an approximate 25-cent impact on fiscal 2019 comparable basis EPS results. Constellation also continues to evaluate the potential equity in earnings impact from the Canopy Growth investment and related items.
"Our cash position opens up a world of opportunity for us," said Bruce Linton, chairman and co-chief executive officer, Canopy Growth. "Relative to our valuation, we have never been in a better position to create shareholder value. This investment was a landmark moment for the entire sector when it was announced. Now that the capital is Canopy's to deploy, we're going to quickly get to work increasing our lead by adding strategic assets around the world."
As previously announced, the transaction includes a restructuring of Canopy Growth's board of directors. Canopy Growth management wishes to thank Chris Schnarr and Murray Goldman for their contributions to the company. Mr. Schnarr and Mr. Goldman sat on the board as it oversaw a transformative period for Canopy Growth from a small start-up to a global, diversified industry leader. Mr. Schnarr will continue with Canopy Growth and transition into a senior leadership role overseeing medical and therapeutic research commercialization. Subsequently, Canopy Growth management welcomes Constellation's president and chief operating officer Bill Newlands and executive vice-president and chief financial officer David Klein, as well as current Constellation board members Judy Schmeling, former HSNi LLC chief operating officer, and Robert Hanson, chief executive officer of John Hardy Global Ltd., to the Canopy Growth board. Their leadership and experience will be invaluable as Canopy Growth continues to grow around the world.
About Constellation Brands
Constellation Brands, a Fortune 500 company, is a leading international producer and marketer of beer, wine and spirits with operations in the United States, Mexico, New Zealand, Italy and Canada. Constellation is the No. 3 beer company in the U.S. with high-end, iconic imported brands such as Corona Extra, Corona Light, Modelo Especial, Modelo Negra and Pacifico. The company's beer portfolio also includes Ballast Point, one of the most awarded craft brewers in the U.S., and Funky Buddha Brewery. In addition, Constellation is the world leader in premium wine, selling great brands that people love, including Robert Mondavi, Clos du Bois, Kim Crawford, Meiomi, Mark West, Black Box, Ruffino and the Prisoner. The company's premium spirits brands include Svedka Vodka, Casa Noble Tequila and High West Whiskey.
Based in Victor, N.Y., the company believes that industry leadership involves a commitment to brand building, our trade partners, the environment, our investors and to consumers around the world who choose our products when celebrating big moments or enjoying quiet ones. Founded in 1945, Constellation has grown to become a significant player in the beverage alcohol industry with more than 100 brands in its portfolio; about 40 wineries, breweries and distilleries; and approximately 10,000 talented employees. We express our company vision: to elevate life with every glass raised. To learn more, follow on Twitter or visit its website.
About Canopy Growth Corporation
Canopy Growth is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and softgel capsule forms. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. The company has operations in 12 countries across five continents. The company is proudly dedicated to educating health care practitioners, conducting robust clinical research and furthering the public's understanding of cannabis, and through its partly owned subsidiary, Canopy Health Innovations, has devoted millions of dollars toward cutting-edge, commercializable research and IP development.
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