Liberty Health Sciences Inc. (CSE: LHS) (OTCQX: LHSIF) (“Liberty” or the “Company”) and Ayr Strategies Inc. (CSE: AYR.A) (OTCQX: AYRWF) (“Ayr”) are pleased to announce that they have entered into a definitive arrangement agreement (the “Agreement”) pursuant to which Ayr will acquire all of the issued and outstanding shares
| TORONTO, Dec. 22, 2020 /PRNewswire/ - Liberty Health Sciences Inc. (CSE: LHS) (OTCQX: LHSIF) (“Liberty” or the “Company”) and Ayr Strategies Inc. (CSE: AYR.A) (OTCQX: AYRWF) (“Ayr”) are pleased to announce that they have entered into a definitive arrangement agreement (the “Agreement”) pursuant to which Ayr will acquire all of the issued and outstanding shares (the “Liberty Shares”) of Liberty in an all-share transaction for a total consideration of approximately $372 million (or US$290 million) on a fully-diluted basis1 (the “Transaction”).
Proposed Transaction Under the terms of the Arrangement, shareholders of Liberty will receive 0.03683 of a subordinate voting share or restricted voting share for each Liberty Share held (the “Exchange Ratio”), subject to adjustment described below. The Exchange Ratio implies a price per Liberty Share of approximately $1.05, representing a premium of approximately 94% based on the closing price of Liberty Shares and Ayr Shares on the CSE as of December 21, 2020. Transaction Highlights
Liberty Operational Update: As previously announced on December 11, 2020, Liberty recently opened its 28th dispensary in Lake City. The Company has plans to strategically open three more dispensaries by the end of February 2021 and an additional 11 stores throughout the remainder of 2021, for a total of 42 locations throughout Florida, subject to approval from the Florida Department of Health. The Company continues to make strong progress on its greenhouse expansion project and successfully completed its full first harvest of Seed JunkyTM strains at one of the Company’s recently retrofitted, 20,000 square foot greenhouses. The harvest of Seed JunkyTM strains saw a nearly four-times multiple on dry yields compared to Liberty’s historical harvests, and the premium product arrived at the Company’s dispensaries in early November. The improvement in flower yields is expected to significantly enhance product availability at Liberty dispensaries and will provide our customers with some of the highest quality, high-potency dried flower available in all of Florida. On the manufacturing and product formulation side, Liberty also recently launched its ethanol extraction capabilities, which has significantly increased its oil production and is expected to allow the Company to introduce new concentrate products to the market. Furthermore, Liberty is currently in the process of obtaining regulatory approvals for its edibles kitchen. The new concentrate and edible products are expected to launch in early 2021. Management Commentary: “This transaction is a win-win-win for Liberty’s patients, shareholders, and stakeholders. With the support from Ayr, Liberty dispensary openings across the state will accelerate and product expansion will be enhanced. Shareholders will benefit not only from the strong growth in the Florida market, but also from the growth in other key states. Our employees will have exposure to new opportunities and career paths. We are delighted to become part of the AYR family of companies,” said George Gremse, Interim Chief Executive Officer and Director of Liberty. “We are thrilled be entering the rapidly growing and robust Florida medical market and excited to do so from a position of strength with 335 great new members of the Ayr team ready to lead the way. At Ayr, we aim higher to be a leader in every market we enter, with great assets and the strongest team. We look forward to combining our strengths to take Liberty’s already strong market position to the next level in Florida”, added Jon Sandelman, Chairman and Chief Executive Officer of Ayr Strategies. Terms of the Transaction: The Transaction will be effected by way of plan of arrangement under the Business Corporations Act (British Columbia). Under the terms of the Arrangement, shareholders of Liberty will receive 0.03683 of a subordinate voting share or restricted voting share (“Ayr Shares”) for each Liberty Share held (the “Exchange Ratio”). Notwithstanding the foregoing:
The Exchange Ratio implies a price per Liberty Share of approximately $1.05, representing a premium of approximately 94% based on the closing price of Liberty Shares and Ayr Shares on the CSE as of December 21, 2020. After giving effect to the Transaction, Liberty Shareholders will hold approximately 20% ownership in the pro forma entity (on a pro forma fully-diluted in-the-money basis)1,2. Upon completion of the Transaction, Liberty will nominate one (1) independent director to serve on the board of directors of Ayr. The Transaction has been unanimously approved by the board of directors of each of Liberty and Ayr. The Agreement contains customary representations, warranties and covenants for transactions of this nature, including a termination fee of $13.0 million (“Termination Fee”) payable by Liberty to Ayr, in the event that the Transaction is terminated in certain circumstances. The Transaction is subject to, among other things, the approval of Liberty shareholders at a special meeting (the “Special Meeting”), receipt of required all applicable CSE, regulatory and court approvals, and other customary conditions of closing. Approval of Ayr shareholders is not required. Additional details of the Transaction will be provided to Liberty Shareholders in an information circular to be mailed in connection with the Special Meeting. It is currently anticipated that, subject to receipt of all regulatory, court, shareholder and other approvals, the Transaction is expected to be completed in the first quarter of 2020. The board of directors of Liberty unanimously recommends that Liberty shareholders vote in favour of the resolution to approve the Transaction at the Special Meeting. The board of directors of Liberty has obtained fairness opinions from each of ATB Capital Markets Inc. and Cormark Securities Inc. that states that, as of the date of the opinions and subject to the assumptions and limitations contained in such opinions, the consideration to be received by holders of Liberty Shares pursuant to the Transaction is fair, from a financial point of view, to the holders of Liberty Shares. Ayr Pro Forma Footprint Upon completion of the Transaction and Ayr’s pending acquisitions in Pennsylvania, Arizona, and Ohio, as previously disclosed by Ayr, and Ayr’s recently announced acquisition in New Jersey, the pro forma company will have operations in seven key US markets covering a population of 73 million, 43 operational dispensaries and 554,000 sq. ft. of cultivation. Financial and Legal Advisors ATB Capital Markets Inc. acted as financial advisor to Liberty and provided a fairness opinion to the Liberty Board. Cormark Securities Inc. provided an independent fairness opinion to the Liberty Board. Miller Thomson LLP, Nauth LPC and Greenspoon Marder LLP acted as legal advisors to Liberty. Dorsey & Whitney LLP and Stikeman Elliott LLP acted as legal advisors to Ayr. Canaccord Genuity Corp. provided a fairness opinion to the board of directors of Ayr. Conference Call & Investor Presentation Ayr CEO Jonathan Sandelman, COO Jennifer Drake and CFO Brad Asher will host the conference call, followed by a question and answer period to discuss today’s announced transactions. Conference Call Date: Tuesday, December 22, 2020 Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860. The conference call will be broadcast live and available for replay here. A telephonic replay of the conference call will also be available through January 22, 2021. Toll-free replay number: (855) 699-9658 An investor presentation providing an overview of the Transaction will be made available on each of Liberty’s and Ayr’s investor websites. About Liberty Health Sciences Inc. Liberty Health Sciences is an integrated “seed-to-sale” company that provides medical marijuana products to patients throughout the State of Florida. All its cultivation and processing is done at its 387-acre Gainesville, Florida facility. Patients purchase products either through Liberty’s statewide network of dispensaries or via company provided home delivery. Liberty’s stock trades in the United States on the OTCQX market under the symbol LHSIF and on the Canadian Securities Exchange under the symbol LHS. For more information, please visit: www.libertyhealthsciences.com About Ayr Strategies Inc. Ayr Strategies (“Ayr”) is an expanding vertically integrated, U.S. multi-state cannabis operator, focusing on high-growth markets. The Company cultivates and manufactures branded cannabis products for distribution through its network of retail outlets and through third-party stores. Ayr strives to enrich consumers’ experience every day – helping them to live their best lives, elevated. Ayr’s leadership team brings proven expertise in growing successful businesses through disciplined operational and financial management, and is committed to driving positive impact for customers, employees and the communities they touch. For more information, please visit www.ayrstrategies.com. Forward-Looking Statements: CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains certain forward-looking statements within the meaning of applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expect”, “believe”, “plan”, “pro forma”, “intend” or the negative of these terms and similar expressions. Forward-looking statements in this news release include, but are not limited to, expectations related to Liberty and Ayr’s respective production capabilities, expectations concerning the receipt of all necessary approvals from the Florida Department of Health and other regulatory authorities and the Canadian Securities Exchange to the Transaction, expectations concerning the opening of new dispensaries and the expansion of its greenhouse space, as well as all statements in this press release regarding future expansion and growth strategies. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments involving medical marijuana; the medical marijuana industry in the United States generally, income tax and regulatory matters; competition; crop failure; currency and interest rate fluctuations and other risks. . There is no assurance that the Transaction will be completed on the terms disclosed or at all. Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions, or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. __________________________________
SOURCE Liberty Health Sciences Inc. | ||
Company Codes: OTC-QX:LHSIF, CNSX:AYR.A, CNSX:LHS, OTC-PINK:AYRWF, OTC-PINK:LHSIF, OTC-QX:AYRWF |
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