Aurora Cannabis (TSE: ACB) has continued its ambitious expansion drive by snapping up Uruguayan market leader ICC Labs Inc. (CVE: ICC) in a C$290 million ($220 million) deal.
ICC is headquartered in Vancouver, but it has offices in Montevideo and controls 70% of the Uruguayan regulated cannabis market. Uruguay was the first country to legalize cannabis, with Canada soon to follow, and Aurora Cannabis is determined to carve out a leading share of this burgeoning industry. It has bought more than 10 rival firms in the past year and its voracious appetite for growth shows no signs of slowing down any time soon.
The plan is to rapidly establish a powerful global footprint and Aurora is going about it in an urgent fashion. “ICC is an ideal partner for Aurora to establish leadership in the South American cannabis market, delivering clear first mover advantage on a continent with over 420 million people,” said chief executive Terry Booth, who founded the company in 2013.
“ICC and its management team have shown exceptional vision and execution across production, expansion, distribution and product development. The company has a very strong management team with deep connections throughout the continent, which we believe will facilitate successful expansion into all South American markets.”
Booth sold quarters of weed back in high school before embarking on a career as an electrician. He was running his construction permit firm when he got into the legal cannabis market, and he is now a multimillionaire, with the largest stake in Canada’s second biggest marijuana firm. He’s excited about emerging South American cannabis markets and he believes ICC gives his company a great platform to dominate the continent.
ICC is on the brink of finishing the production of South America’s first high-class cannabis lab, which will soon be certified in compliance with international standards. Alejandro Antalich has led the firm through a sustained period of growth and he said the “complementary nature of the two organizations and the shared philosophies made this an ideal match” for them to achieve even more progress in this area. The transaction remains subject to certain closing conditions like Uruguayan regulatory approvals and the consent of Aurora’s lenders, but the deal is as good as done.
The deal gives Edmonton-headquartered Aurora a strong platform for expansion, allowing it to capitalize on low-cost production capacity and a broad range of ICC products, plus its existing distribution channels. Experts predict that the news could spark a number of mergers and acquisitions in the weeks ahead.
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