Send me real-time posts from this site at my email
Motley Fool

Aphria to Acquire U.S. Brewer for $300 Million

Aphria (NASDAQ: APHA) is reaching across the border for a new acquisition. The Canadian marijuana company announced Wednesday that it has reached an agreement to buy American beer maker SW Brewing Company, also known as SweetWater Brewing. The price is around $300 million; Aphria was not more specific.

SweetWater dates from the big emergence of craft beer in the 1990s, and has various beers that use what Aphria describes as "terpenes and natural hemp flavors that, when combined with select hops, emulate the flavors and aromas of popular cannabis strains." The company was founded in 1997, and according to Aphria, its products are distributed to 27 states and the District of Columbia.

Image source: Getty Images.

In 2019, Aphria says, SweetWater booked net revenue of $66.6 million, and its adjusted earnings before interest, taxes, depreciation and amortization (EBIDTA) were $22.1 million. A bottom-line figure was not provided.

Owning SweetWater will give Aphria something of a stalking horse in the likely case that legalized marijuana continues to expand in the U.S., particularly when and if this occurs at the federal level.

"In addition to acquiring a strong brand and accretive business, this strategic acquisition positions Aphria with a platform and infrastructure within the U.S. to enable it to access the U.S. market more quickly in the event of federal legalization," the company stated in the press release trumpeting the SweetWater deal.

Aphria estimates that with SweetWater in its portfolio, the brewer's business will account for 15% of its net sales. It's assuming that the acquisition will be immediately accretive to its EBITDA.

The deal is expected to close before the end of this year.

Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming.

Cannabis legalization is sweeping over North America – 11 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.

And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.

Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.

Simply click here to get the full story now.

Learn more

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue