Canada’s Aurora Cannabis (ACB) has bought privately held Safari Flower Co. in a stock-and-cash deal valued at $26.5 million as it looks for opportunities overseas.
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The deal includes a $2-million cash payment that is contingent on satisfaction of certain conditions. In a news release, Aurora Cannabis said that Safari Flower has a certified indoor cultivation and manufacturing facility that will benefit it moving forward.
More broadly, Aurora Cannabis said that the deal will increase its exposure to key international markets, including Germany, Australia, Poland, and the United Kingdom, and support further market expansion beyond Canada.
The Busted Canadian Marketplace
Aurora CEO Miguel Martin said in the news release that the acquisition of Safari Flower marks an important milestone as the company looks to grow its international medical cannabis business. The purchase also comes as Canada’s domestic cannabis market flounders.
Martin added that Aurora Cannabis is looking to enhance its supply chain and capture greater international market share as the domestic market in Canada stagnates under stringent government regulations and a thriving black market for the recreational drug.
Is ACB Stock a Buy?
Aurora Cannabis’ stock has a consensus Strong Buy rating among three analysts. That rating is based on three Buy ratings issued in the last 12 weeks. The average ACB price target of $6.66 implies 80% upside from current levels.
