Aurora Cannabis Inc. announced a dramatic restructuring of the marijuana producer that involves nearly $800 million in goodwill writedowns and the departure of hundreds of staff including its chief executive officer.
The Edmonton-based company revealed on Thursday — after markets closed and a few hours after trading of its stock was halted — that Terry Booth will immediately retire and it will eliminate the positions of about 500 staff, 25 per cent of which are corporate positions.
Aurora’s website boasts of 3,400 employees, which could mean the staff reductions may ensnare about 15 per cent of its workforce.
Aurora said executive chairman Michael Singer has been appointed interim CEO and a search for a permanent successor is underway. Booth will remain a director and become a senior strategic adviser to the board. Lance Friedmann and Michael Detlefsen will be added to the board.
“We believe our succession plan, expansion of the board and the rationalization of our business will make Aurora much stronger and more focused than ever before,” said Singer on a call with analysts, just after the announcement.
“We believe these are the right moves at the right time, and put our shareholders in the best position for value creation.”
The moves are the product of a detailed evaluation of all capital projects underway that will see a restructuring of spending plans related to technology, sales and marketing, travel and entertainment, professional services and non-revenue generating third-party costs.
The company previously decided to reduce its capital expenditures to below $100 million for the second half of fiscal 2020, but Thursday’s announcement also revealed that Aurora expects to report asset impairment charges on certain intangible and property, plant and equipment in the range of $190 million to $225 million and goodwill writedowns between $740 million and $775 million.
“These changes represent the start of a fundamental change in focus for Aurora as we look to generate sustainable, profitable growth, which is even more important in the context of our business rationalization,” said Singer. “We remain firmly of the opinion that a tremendous global opportunity still exists, but Aurora needs to rationalize the business today and drive as quickly as we can to generate positive cash flow.”
His remarks were echoed by Booth.
“These changes, along with the financial transformation which we are undertaking, should clearly demonstrate to investors that Aurora has the continuity, strategic direction and leadership it needs to transition from its entrepreneurial roots to an established organization well positioned to capitalize on a global growth opportunity,” he said in a statement.
He noted that he is both “proud” and “humbled” to have led the company, but feels “the timing is right” for him to step away.
“He recognizes that the next leg of our journey will be best led by a CEO with a different skillset,” said Singer. “Terry deserves an immense amount of credit as an icon and visionary in the cannabis industry.”
Aurora is one of the world’s largest cannabis companies with operations in 25 countries and 17 subsidiaries, including MedReleaf, CanvasRX and CanniMed Therapeutics. It has invested in and formed strategic partnerships with brands including Choom Holdings Inc. and High Tide Inc.
Aurora has faced rocky times in recent months. Its chief corporate officer Cam Battley, often the public face of the company who was credited for much of its early success, abruptly stepped down in December.
It said in November that it would immediately cease construction of its Aurora Nordic 2 facility in Denmark to save about $80 million, plus indefinitely defer completion of construction and commissioning at its Aurora Sun facility in Alberta to conserve $110 million. That news came as Aurora shares sank to a two-year low.
Its stock has plummeted in value in recent months and often hovers between $2 and $4. The shares lost 14.4 cents or 5.2 per cent to close at $2.66 on the Toronto Stock Exchange.
The company’s announcement comes just after Tilray Inc. announced on Tuesday the layoff of 10 per cent of its workforce in an effort to cut costs. The company — with a total head count of about 1,443 — said the move would help it better meet the needs of the industry and foster growth in 2020 and beyond.
Aurora is far from the first North American cannabis company to be hit with executive departures this year. TerrAscend Corp., Sundial Growers Inc., Supreme Cannabis Co, MedMen Enterprises Inc. and Flowr Corp. have all seen leadership exits in the last month.
Commercial fishers and wild salmon advocates cheer large returns to B.C. waters
VICTORIA — The summer of 2022 is shaping up to be a bumper season for both pink and sockeye salmon in British Columbia rivers, with one veteran Indigenous fisherman reporting the biggest catches of sockeye in decades.
Mitch Dudoward has worked in the salmon industry for more than 40 years, and says fishing on the Skeena River in northwest B.C. has never been better.
“This is the best season I can recall in my lifetime with the numbers we are catching,” said Dudoward, who recently completely a big sockeye haul aboard his gillnetter Irenda.
Bob Chamberlin, chairman of the Indigenous-led First Nations Wild Salmon Alliance, meanwhile said that thousands of pink salmon are in Central Coast rivers after years of minimal returns.
The strong run comes two years after the closure of two open-net Atlantic salmon farms in the area.
“We had targeted those farms,” said Chamberlin, whose group wants open-net farms removed from B.C.’s waters. “We got them removed and two years later we went from 200 fish in the river to where we have several thousand to date. In our mind and knowledge that is a really clear indicator.”
Fisheries and Oceans Canada spokeswoman Lara Sloan said departmental observations indicated big returns of sockeye to the Skeena River.
“Test fisheries currently indicate that Skeena sockeye returns are tracking at the upper end of the forecast, with an in-season estimate of approximately four million sockeye,” said Sloan in a statement. “Sockeye populations returning to a number of areas in British Columbia, Washington and Alaska are returning better than forecast in 2022.”
The five-year average return of sockeye to the Skeena is 1.4 million and the 10-year average is 1.7 million, Sloan said.
Dudoward said the Skeena sockeye season ended this week, but it could have gone on longer.
“We should be fishing until the end of August when the sockeye stop running,” he said. “There’s plenty of them to take.”
But Sloan said the Fisheries Department was being careful about salmon stocks.
“For 2022, the department is taking a more precautionary approach toward managing impacts of commercial fisheries on stocks of conservation concern including smaller wild sockeye populations, chum and steelhead returning to the Skeena River,” she said.
The Fisheries Department also expects a large sockeye run to the Fraser River this summer, but returns of chinook, coho and chum to northern and Central Coast rivers and streams are expected to be low.
“The forecast range for Fraser River sockeye in 2022 is 2.3 million to 41.7 million, with a median forecast of 9.7 million,” said Sloan. “The median forecast means there is a 50 per cent chance returns will come in below that level.”
That is well above the estimated 2.5 million sockeye returns in 2021, according to Fisheries and Oceans Canada data.
The strong returns come amid debate over the future of open-net salmon farming in B.C. waters.
In 2018, the B.C. government, First Nations and the salmon farming industry reached an agreement to phase out 17 open-net farms in the Broughton Archipelago between 2019 and 2023.
The agreement was negotiated to establish a farm-free migration corridor to help reduce harm to wild salmon.
In June, federal Fisheries Minister Joyce Murray said the government will consult with First Nations communities and salmon farm operators in the Discovery Islands, near Campbell River on Vancouver Island, about the future of open-net farming in the area.
A final decision on the future of the farms is expected in January 2023, the minister said.
“That is such a key migratory route of all Fraser River salmon, in particular coho and chinook,” Chamberlin said. “If we are going to see Fraser runs return, we need to see removal of impediments.”
This report by The Canadian Press was first published Aug. 10, 2022.
Dirk Meissner, The Canadian Press
Montreal-based WSP Global to buy U.K. environmental consulting company in third takeover in just three months – The Globe and Mail
Canadian engineering giant WSP Global Inc. WSP-T is buying British environmental consulting firm RPS Group Plc in a deal worth almost a billion dollars, its third major takeover in just three months.
Montreal-based WSP said it struck a deal Monday to acquire RPS for £2.06 per share in cash for a total enterprise value of £625-million, or $975-million. It is paying 15 times RPS’s adjusted earnings before interest, taxes, depreciation and amortization for the 12 months ended June 30.
“RPS is of utmost value to WSP for its sustainability focus, global presence, expertise and talent,” WSP chief executive Alexandre L’Heureux told analysts on a conference call after markets closed. The takeover of RPS’s 5,000 employees brings additional scale to WSP and advances its efforts to expand its front-end consulting work, he said.
Demand for environmental engineering and consulting services is growing as private-sector companies and governments seek advice on things ranging from climate-change risks to waste management. WSP is beefing up its capabilities in the space as part of a wider growth effort.
This is the company’s third major takeover in as many months. In June, it said it had struck a definitive agreement to acquire a business known as Environment & Infrastructure (E&I) from Aberdeen, Scotland-based Wood for US$1.8-billion, adding another 6,000 employees to its payroll. Earlier this month, WSP said it would buy Capita Plc’s Capita REI and GL Hearn businesses in the U.K. for £60-million in a smaller deal that adds skill in real estate planning.
Once a boutique engineering company, WSP has ballooned in recent years to become a major player in global design consultancy and project management, with a current market capitalization topping $18-billion. Mr. L’Heureux wants to expand the company further. He outlined a three-year strategic plan this March that aims to boost net revenues 30 per cent to well over $10-billion a year and increase adjusted net earnings per share by 50 per cent by 2024.
WSP said it secured a new bank credit facility worth £600-million (about $935-million), including commitments for the full amount of the RPS purchase price, in order to meet British takeover regulations. But it intends to use the proceeds from share sales to fund the takeover.
The company said it will sell $400-million worth of equity in a bought deal with a syndicate of underwriters led by CIBC Capital Markets, National Bank Financial and RBC Capital Markets. It will raise another $400-million in a private placement with three existing WSP shareholders: Singapore sovereign wealth fund GIC, Canadian pension fund manager Caisse de dépôt et placement du Québec and the Canadian Pension Plan Investment Board.
London Stock Exchange-listed RPS generates about two-thirds of its revenue from environmental work and water services and has longstanding relationships with major water utilities in the U.K. and Ireland, Mr. L’Heureux said. It has also developed a deep expertise in oceanic science, which it uses to support offshore wind energy players, he added.
RPS’s board intends to recommend the deal, WSP said. The Canadian company said it has the backing of directors and other shareholders holding about 18 per cent of RPS stock.
WSP is one of the most active companies in Canadian infrastructure megaprojects – involved in the development of 18 of the 20 biggest projects currently under way, according to trade publication ReNew Canada. This latest takeover would bring its total employee count to 70,000 and boost revenue to $10-billion a year on a pro-forma basis.
The engineering firm’s recent contracts illustrate the kind of work it is now bidding on as it tries to reshape itself as one of the world’s top companies with environmental expertise. In Canada, it won a mandate from pension fund PSP Investments to conduct a detailed climate analysis of more than three million hectares of farmland and timberland in its Global Natural Resources Portfolio.
In the United States, WSP was awarded a contract for engineering, procurement and construction management for the underground storage of the Aces Delta project, the largest green hydrogen production and storage facility ever built. WSP says the facility will help decarbonize the Western U.S. power grid by providing seasonal clean energy storage capabilities.
WSP shares rose 0.8 per cent in Monday trading on the Toronto Stock Exchange, closing at $157.58. The stock is down 16 per cent since hitting an all-time high of $187.94 last November.
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Fairfax offering to buy chain that owns Swiss Chalet, Harvey's and The Keg for $1.2B – CBC News
Fairfax Financial Holdings Ltd. has proposed taking Recipe Unlimited Corp. private in the latest phase for the almost 140-year-old restaurant company.
The deal announced by Recipe Unlimited Tuesday puts a $1.2 billion value on Canada’s oldest and largest full-service restaurant chain, which counts Swiss Chalet, Harvey’s and The Keg among its roughly two-dozen brands.
Fairfax is already the controlling shareholder of Recipe Unlimited, owning 38.5 per cent of the equity interest as of the end of last year for about 61 per cent of the voting rights.
The other major shareholder is Cara Holdings Ltd., the holding company of the Phelan family, which would continue as an investor in the company once it goes private.
Recipe Unlimited first went public in 1968, then known as CARA for the first two letters of Canadian Railway, which links back to the company’s original founding in 1883 as the Canada Railway News Co. that catered to railway travellers.
Cara Holdings Ltd. took the company private again in 2004 and in 2013 Fairfax made a deal to bring several restaurants including East Side Mario’s and Casey’s into the company’s portfolio before the company relisted publicly in 2015.
The deal announced Tuesday would see a group of Fairfax affiliates acquire all outstanding shares, except for some shares held by Cara Holdings, at $20.73 in cash.
The offer price represents a 53.4 per cent premium to Recipe Unlimited’s closing price on Aug. 8, according to a company statement. Recipe, however, was trading at about $21 a share as recently as last November before it started declining along with the wider market, and traded above $36 a share in its first year of returning to the market in 2015.
The deal requires the approval of most of the minority shareholders and Recipe Unlimited says its board intends to recommend that shareholders vote in favour of the proposed transaction at a special meeting of shareholders to be held on the matter.
The deal comes only a few days after Fairfax said it and partners were also taking private U.K.-based Atlas Corp., which owns the Seaspan shipping company and APR Energy.
The Atlas deal has Fairfax and partners buying shares at $14.45, which represents a 32.1 per cent premium over the 30 day average closing price on the New York Stock Exchange, but is in line with where the company was trading in late March.
Recipe shares have been under pressure during the pandemic as it had been forced to close in-restaurant dining at many locations.
The company has seen sales rebound lately as restrictions ease, reporting last week that its system sales were up 55 per cent to $873 million. Recipe Unlimited had 1,223 restaurants at the end of the quarter, down from 1,330 last year.
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