March 13, 2019 / 4:36 PM / 7 months ago

BUZZ-Hexo Corp: Newstrike Brands buy to boost recreational marijuana position

** Canadian marijuana producer’s shares up 7.2 pct at C$7.93 after co agrees to buy Newstrike Brands in all-stock deal for about C$263 mln

** Newstrike shareholders to receive 0.06332 of HEXO common stock for each share held Newstrike up 10 pct at C$0.495

** Deal gives HEXO access to four production facilities totaling close to 1.8 mln sq ft of near-term cultivation space & capacity to produce ~150,000 kg of cannabis annually

** HEXO to own 86 pct and Newstrike rest of combined co which is estimated to realize annual synergies of C$10 mln

** Expects net revenues from sale of cannabis in Canada to be more than C$400 mln for fiscal 2020 after deal closes

** Deal should better position Hexo in recreational market - Jefferies

** Including session gains, stock up ~68 pct YTD (Reporting by Shanti S Nair in Bengaluru)

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