LAVAL, QC, July 24, 2019 /CNW Telbec/ - Alimentation
Couche-Tard Inc. ("Couche‑Tard") (TSX: ATD.A) (TSX: ATD.B)
announces that it has entered into a definitive agreement (the
"Agreement") to make a strategic investment (the "Transaction") in
Fire & Flower Holdings Corp. ("Fire & Flower") (TSXV: FAF),
a leading independent cannabis retailer based in Edmonton, Alberta. Fire & Flower currently
operates or licenses 23 cannabis retail stores in Alberta, Saskatchewan and Ontario, a wholesale distribution division in
Saskatchewan, and the leading
HiFyreTM digital retail platform designed to connect
consumers to the world of cannabis.
This investment will provide Fire & Flower with additional
capital to further accelerate their expansion strategy. Through
their strong leadership team with years of balanced experience in
the cannabis and retail sectors, Fire & Flower has demonstrated
their capability of rapidly scaling their retail network through a
best-in-class store concept, their proprietary HiFyreTM
platform, and a focus on the safe, responsible and lawful sale of
cannabis.
Transaction Highlights
- Couche-Tard will invest $25,989,985.42 in the form of unsecured
convertible debentures (the "Debentures") to obtain a 9.9%
ownership interest in Fire & Flower upon conversion;
- Couche-Tard will concurrently receive three series of share
purchase warrants, which, if exercised in full, would subsequently
increase Couche-Tard's ownership interest to 50.1% on a fully
diluted basis (assuming the conversion in full of the
Debentures);
- At closing, Couche-Tard will immediately be granted nomination
rights to the board of Fire & Flower, which will escalate
commensurate with the exercise of the warrants and the increase in
Couche-Tard's ownership position; and
- In connection with the Transaction, Couche-Tard will also be
granted participation and top-up rights in order to maintain its
equity ownership percentage going forward as well as certain
customary registration rights.
"Couche-Tard is excited to make this strategic investment in one
of the fastest growing cannabis 'pure-play' retailers," said
Brian Hannasch, President and CEO of
Couche‑Tard. "This investment in Fire & Flower, with a path to
a controlling stake, will enable us to leverage their leadership,
network and advanced digital platform to accelerate our journey in
this new and flourishing sector."
"This strategic investment by Couche-Tard, one of the world's
largest retailers, is transformative for Fire & Flower," shared
Trevor Fencott, Fire & Flower's
Chief Executive Officer. "The support of Couche-Tard's world-class
leadership team, coupled with their capital strength and impressive
international footprint, provides us with outstanding opportunities
for aggressive growth."
Issuance of Convertible Debentures
- Under the Agreement, Fire & Flower will issue to
Couche-Tard $25,989,985.42 principal
amount of Debentures;
- The Debentures may be converted into common shares of Fire
& Flower (the "Common Shares") at a price of $1.07 per Common Share;
- The Debentures will bear interest at a rate of 8.0% per annum,
payable semi‑annually in cash or in shares at the election of Fire
& Flower;
- The Debentures will mature on the later of (i) June 30, 2021; and (ii) the date that is 90 days
following the date certain existing debt of Fire & Flower is
retired, converted or otherwise transferred (the "Maturity
Date");
- Should Fire & Flower (or an affiliate) operate not less
than 45 licensed cannabis retail stores in Canada under the "Fire & Flower" brand,
the Maturity Date may be accelerated by Fire & Flower to as
early as December 31, 2020; and
- Under certain circumstances and conditions, if the Debentures
are not converted prior to the Maturity Date, Fire & Flower may
elect to repay the principal amount of the Debentures, together
with unpaid and accrued interest thereon, in whole or in part,
through the issuance of Common Shares at a price equal to 95% of
the 20-day volume weighted average price of the Common Shares on
the Maturity Date.
Closing of the Transaction
The Transaction is subject
to customary closing conditions and applicable regulatory
approvals, including Fire & Flower shareholder approval.
Concurrent with the entering into of the Agreement, certain
directors, officers and shareholders of Fire & Flower have
entered into voting and support agreements pursuant to which such
parties have agreed to vote an aggregate of 23,069,270 Common
Shares in favor of the Transaction, representing approximately
19.6% of the issued and outstanding Common Shares.
In addition, conditioned upon completion of this Transaction,
Fire & Flower will be graduating from the TSX Venture Exchange
to the TSX, trading under the ticker symbol FAF.
Fire & Flower Board Recommendation
The Board of
Directors of Fire & Flower has unanimously determined that the
Transaction is in the best interest of Fire & Flower and is
unanimously recommending that shareholders of Fire & Flower
vote in favor of the Transaction.
Advisors
National Bank Financial Inc. is acting as
exclusive financial advisor to Couche-Tard and Davies Ward Phillips
& Vineberg LLP is acting as its legal advisor. GMP Securities
L.P. is acting as exclusive financial advisor to Fire & Flower
and Dentons Canada LLP is acting as its legal advisor.
About Alimentation Couche-Tard Inc.
Couche-Tard is the leader in the Canadian convenience store
industry. In the United States, it
is the largest independent convenience store operator in terms of
the number of company-operated stores. In Europe, Couche-Tard is a leader in convenience
store and road transportation fuel retail in the Scandinavian
countries (Norway, Sweden and Denmark), in the Baltic countries (Estonia, Latvia and Lithuania), as well as in Ireland, and has an important presence in
Poland.
As of April 28, 2019,
Couche-Tard's network comprised 9,866 convenience stores throughout
North America, including
8,629 stores with road transportation fuel dispensing. Its
North American network consists of 19 business units,
including 15 in the United
States covering 48 states and 4 in Canada covering all 10 provinces.
Approximately 109,000 people are employed throughout its network
and at its service offices in North
America. In addition, through CrossAmerica Partners LP,
Couche-Tard supplies road transportation fuel under various brands
to approximately 1,300 locations in the United States.
In Europe, Couche-Tard operates
a broad retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through ten business units. As of
April 28, 2019, Couche-Tard's network
comprised 2,709 stores, the majority of which offer road
transportation fuel and convenience products while the others are
unmanned automated fuel stations which only offer road
transportation fuel. Couche-Tard also offers other products,
including stationary energy and aviation fuel. Including employees
at branded franchise stores, approximately 24,000 people work in
its retail network, terminals and service offices across
Europe.
In addition, under licensing agreements, more than 2,150 stores
are operated under the Circle K banner in 15 other
countries and territories (Cambodia, China, Costa
Rica, Egypt, Guam, Honduras, Hong
Kong, Indonesia,
Macau, Mexico, Mongolia, New
Zealand, Saudi Arabia, the
United Arab Emirates and
Vietnam), which brings the
worldwide total network to more than 16,000 stores.
For more information on Alimentation Couche-Tard Inc. or to
consult its quarterly Consolidated Financial Statements and
Management Discussion and Analysis, please visit:
https://corpo.couche‑tard.com.
About Fire & Flower Holdings Corp.
Fire & Flower is a leading purpose-built, independent
adult-use cannabis retailer poised to capture significant Canadian
market share. The Company guides consumers through the complex
world of cannabis through education-focused, best-in-class
retailing that is centered around its proprietary HiFyre™ digital
platform. The Company's leadership team combines extensive
experience in the cannabis industry with strong capabilities in
retail operations. For more information, please visit:
https://fireandflower.com
Forward-Looking Statements
The statements set forth in
this press release, which describes Couche-Tard's objectives,
projections, estimates, expectations or forecasts, may constitute
forward‑looking statements within the meaning of securities
legislation. Positive or negative verbs such as "believe", "can",
"shall", "intend", "expect", "estimate", "assume" and other related
expressions are used to identify such statements. Couche-Tard would
like to point out that, by their very nature, forward-looking
statements involve risks and uncertainties such that its results,
or the measures it adopts, could differ materially from those
indicated in or underlying these statements, or could have an
impact on the degree of realization of a particular projection.
Major factors that may lead to a material difference between
Couche‑Tard's actual results and the projections or expectations
set forth in the forward-looking statements include the effects of
the integration of acquired businesses and the ability to achieve
projected synergies, fluctuations in margins on motor fuel sales,
competition in the convenience store and retail motor fuel
industries, exchange rate variations, and such other risks as
described in detail from time to time in documents filed by
Couche‑Tard with securities regulatory authorities in Canada. Unless otherwise required by
applicable securities laws, Couche-Tard disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
The forward-looking information in this release is based on
information available as of the date of the release.
View original
content:http://www.prnewswire.com/news-releases/alimentation-couche-tard-announces-a-strategic-investment-in-fire--flower-a-leading-cannabis-retailer-300889989.html
SOURCE Alimentation Couche-Tard Inc.
