ial Growers Inc (NASDAQ: SNDL) rallied 17% during premarket trading after the cannabis firm unveiled plans to acquire Candian liquor retailer Alcanna Inc for $360 million.
The transaction will be funded via a share swap where Alcanna shareholders will receive 10.69 Sundial shares for every single share they own due to the massive difference in the two companies stock prices.
The acquisition will give Sundial a controlling stake in its competitor Nova Cannabis in which Alcanna has a 63% stake once the transaction is completed, with the earliest closing date being December.
Sundial will now have access to Alcanna’s 171 liquor stores spread across Canada and operated under three different brands. The company also clarified that it expects to generate an extra $25 million in pretax earnings annually.
Alcanna currently has $16.4 million in free cash flow generated over the past trailing 12 month period, an impressive feat in itself.
Investors cheered the move given the premarket rally in Sundial stock, but the company’s shares were still trading way below their all-time highs of $13.21 hit shortly after its IPO in August 2019.
Long-term investors would like to see the company’s shares rally higher given its recent acquisition spree, which includes the acquisition of Spiritleaf Holdings in July 2021.
The Acquisition of Inner Spirit Holding gave Sundial access to the over 100 stores operated by the company’s Spiritleaf Holdings cannabis retail store brand.
Sundial Growers was trading at $0.84 when the deal closed but has since fallen to its closing price yesterday of $0.648.
It remains to be seen whether Sundial Grower’s shares shall rally higher in the future, rewarding its shareholders following the latest acquisition.
*This is not investment advice.
Sundial Growers stock price.
Sundial Growers stock price rallied 17% premarket to trade at $0.758, rising from Thursday’s closing price of $0.648.
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