viewTilray Inc

Tilray signs deal to extend shares sale lock-up in acquisition of largest shareholder

Under the terms of the merger, Tilray will issue up to 75 million company shares to equity holders of Privateer Holdings Inc and cancel 75 million shares currently owned by Privateer

Tilray Inc - Tilray Inc signs definitive agreement to acquire its largest shareholder Privateer Holdings Inc in downstream merger
The merger gives Nanaimo, British Columbia-based Tilray increased flexibility

Tilray Inc (NASDAQ:TLRY) announced Monday that it has signed a definitive agreement to extend the lock-up of the sales of shares to acquire its largest shareholder in a downstream merger.

Under the terms of the merger, Tilray will issue up to 75 million company shares to equity holders of Privateer Holdings Inc and cancel 75 million shares currently owned by Privateer.

The shares represent 77% of Tilray’s total shares outstanding. The shares are subject to a lock-up, meaning the cannabis company has discretion over any sales of the stock for two years.

READ: Roth analyst can't pin down a price target after Tilray announces downstream merger

Tilray, based in Nanaimo, British Columbia, was originally financed by Privateer as one of its wholly-owned operating subsidiaries before closing a Series A round of capital in February 2018 and then becoming the first cannabis producer to complete an initial public offering on a major US stock exchange in July 2018. 

Earlier this year, Privateer distributed its ownership of its three other operating subsidiaries unrelated to Tilray directly to Privateer stockholders, leaving no material assets in Privateer other than the 75 million shares it currently holds in Tilray, according to a statement. 

During the first year following the closing of the merger, shares will be released at the discretion of Tilray. At the end of the first year, 50% of the total shares subject to the lock-up will be released. 

Over the course of the second year following closing, the remaining shares will be subject to a staggered release in equal quarterly increments.

“We appreciate the long-term confidence that Privateer has in the Tilray business and we look forward to having their investors as part of our stockholder base,” said Tilray CFO Mark Castaneda. "We believe this transaction will give Tilray greater control and operating flexibility while allowing us to effectively manage our public float."

Michael Blue, managing partner of Privateer added: “We are pleased to sign this agreement with Tilray, which we believe will maximize overall returns for our visionary investors in a tax-efficient manner while giving Tilray the operating flexibility it needs to continue to be a leader in the rapidly emerging global cannabis industry.”

Shares of Tilray recently traded down 2% to $31.40. 

Contact the author: [email protected]

Follow him on Twitter @PatrickMGraham

Quick facts: Tilray Inc

Price: 9.07 USD

Market: NASDAQ
Market Cap: $1.31 billion

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...


NQ Minerals' says US$55mln loan facility with ING 'streamlines structure...

NQ Minerals PLC's (AQSE:NQMI)(OTCQB:NQMLF) David Lenigas talks to Proactive London about their US$55mln loan facility with ING. He says 'it's very significant particularly in these Covid-19 times when everyone has been trying to close things from a virtual perspective'. The funds from the...

1 hour, 37 minutes ago

2 min read