Bank of Montreal muscles into marijuana M&A by advising Aurora in biggest deal yet
Bank of Montreal is emerging as the most aggressive of Canada’s big banks in the cannabis industry after landing a mandate to advise on the largest takeover in the sector.
BMO Capital Markets was the exclusive adviser to Aurora Cannabis Inc. on its $3.2 billion all-stock bid to buy MedReleaf Corp., encroaching on the territory dominated by smaller investment banks Canaccord Genuity Group Inc. and GMP Capital Inc. Canaccord advised MedReleaf on the acquisition announced Monday.
The deal propels BMO Capital Markets into second spot for advising on Canadian pharmaceutical acquisitions — the category in which medical marijuana resides — behind Canaccord, according to data compiled by Bloomberg. Bank of Montreal last month advised Hiku Brands Company Ltd.’s on its announced $287.7 million bid to buy WeedMD Inc. Canaccord ranks No. 1 after advising on four deals with a combined value of US$5.15 billion.
BMO Capital Markets became involved in Canada’s pot industry in January after helping lead a $200.7 million equity financing for Canopy Growth Corp., becoming the first major Canadian bank to arrange a stock sale for a pot company. BMO followed up in March, joining other banks on arranging a $100 million share sale by Cronos Group Inc.
Cannabis is one of the few bright spots for equity financing in Canada, which is down about 60 per cent from a year ago, according to Bloomberg data. The industry is valued at about $31 billion on Canadian exchanges and is rapidly consolidating ahead of the legalization of recreational marijuana in the country later this year.
Canaccord ranks No. 2 for arranging overall stock sales in Canada this year, mainly from its leadership position in helping cannabis companies on their equity financings. More than a third of 37 Canadian deals Canaccord has advised on this year were for marijuana companies, according to Bloomberg data, extending the firm’s streak as top adviser in that industry. Bank of Montreal ranks third for overall stock sales in Canada while Toronto-Dominion Bank is top.