Aurora Cannabis Inc., a Canada-based multinational known for its significant role in the global cannabis industry, confirmed the sale of its Aurora Sun Facility in Medicine Hat, Alberta to Bevo Farms Ltd. The sale was completed on July 21, 2023, via Bevo Farms’ acquisition of a wholly-owned subsidiary of Aurora. The transaction could result in payments of up to $15 million by Bevo Farms to Aurora over time, contingent on the achievement of certain financial milestones at the Aurora Sun Facility.
Bevo Farms, a subsidiary of Bevo Agtech Inc., is one of the largest suppliers of propagated vegetables and ornamental plants in North America. Interestingly, Aurora Cannabis Inc. holds a controlling interest in Bevo.
Aurora’s CEO, Miguel Martin, expressed satisfaction with the deal, which he said would improve Aurora’s cash flow while also aiding Bevo’s business expansion. “Bevo has successfully repurposed the Aurora Sky facility in Edmonton, and we’re excited to further support their continued growth. Bevo’s acquisition of the Aurora Sun facility further demonstrates the close synergies between our companies, and the value that our partnership creates for shareholders,” Martin commented.
Leo Benne, Bevo’s CEO, echoed similar sentiments, describing the transaction as beneficial for multiple stakeholders. He mentioned the Alberta greenhouse industry, the City of Medicine Hat and its residents, Bevo, and Aurora as beneficiaries of this deal. He further expressed his gratitude to the City of Medicine Hat for their significant contributions to the transaction, emphasizing Bevo’s commitment to fostering partnerships in Alberta.
This strategic transaction holds promising potential for both parties involved. The deal accelerates Bevo’s plans to increase revenue and earnings, which will be fully consolidated in Aurora’s results due to their controlling interest. It also draws on Bevo management’s substantial agricultural experience of 85 combined years to expand their vegetable and floral propagation production footprint, extending its established distribution reach.
In addition, the deal is expected to result in an annual cost reduction of approximately $2 million for Aurora. These savings stem from the elimination of carrying costs associated with maintaining the Aurora Sun Facility as an idle asset.
The sale of the Aurora Sun Facility by Aurora Cannabis Inc. to Bevo Farms Ltd. marks an important milestone in the strategic partnership between the two companies, underlining the symbiotic relationship that extends beyond mere corporate links, but in bolstering each other’s business growth and operational efficiency.