Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
Aurora Cannabis Inc. (ACB-T) sold its stake in The Green Organic Dutchman Holdings Ltd. (TGOD-T) after markets closed on Tuesday, ending the relationship between the two cannabis firms. The $86.5-million sale, conducted as a block trade, was completed at $3 a share – a 14.5-per-cent discount to Green Organic’s closing price of $3.51 on Tuesday.
Aurora was an early backer of TGOD, investing $55-million in the Mississauga-based producer in January, 2018, and another $23-million in the company when it went public in May, 2018. The two firms, however, have been moving apart since September, 2018, when Aurora’s chief corporate officer Cam Battley stepped down from TGOD’s board of directors with no explanation from either company.
Shortly afterward, Aurora decided not to exercise TGOD warrants that would have given it a further 8-per-cent to 10-per-cent stake in the company. The warrants were exercisable at a 10-per-cent discount to TGOD’s 10-day average share price.
Aurora has been steadily exiting its position in TGOD since then, selling roughly $35-million worth of TGOD shares in October, 2018, at prices between $5.02 and $5.87 per share. It sold several tranches of TGOD shares in January of 2019 at prices as low as $2.47 a share.
- Mark Rendell and Tim Kiladze
Interfor Corp. (IFP-T) announced a plan to reconfigure its B.C. coastal business, including the permanent closure of its Hammond sawmill in Maple Ridge, B.C. and the reorganization of its forestry and woodlands operations.
"This plan is expected to result in the repatriation of working capital tied up at Hammond, the monetization of related real estate and improved results in the years ahead," the company stated.
Duncan Davies, Interfor’s CEO, said the coastal B.C. forest industry has faced "significant log supply challenges over the past two decades and manufacturing capacity needs to be brought into line with available log supply." He also said cedar producers have also been "disproportionately impacted" by duties on shipments into the U.S. as a result of the softwood lumber dispute.”
“The company’s B.C. coastal forestry and woodlands operations will be reorganized to focus on value realization rather than operational integration with Hammond,” the company said, adding that it “will explore opportunities to increase the supply of logs for its Acorn sawmill,” in Delta, B.C.
Dirtt Environmental Solutions Ltd. (DRT-T) lowered its revenue guidance for 2019. In a release issued after markets closed on Tuesday, the company said it expects full-year 2019 revenue will be comparable to its 2018 total revenue. “In previous guidance, management anticipated fiscal 2019 revenue growth at the lower end of 5 per cent to 10 per cent as compared to fiscal 2018,” the company stated.
It said several factors impacted the revenue outlook for the second half of 2019, "including revised timing of various projects from 2019 into 2020 and the loss of certain expected projects."
The company said, "these factors reinforce management’s belief that sales in 2019 have been affected more than previously thought by an immature go-to-market approach and an inadequately supported sales force working on a long sales cycle."
It also said adjusted EBITDA for 2019 will be lower than in 2018, reflecting the impact of expected one-time costs, lower gross profit and foreign exchange losses in 2019 versus foreign exchange gains in 2018. "These reductions will be partially offset by the adoption of a new accounting standard for operating leases," the company stated.
True North Commercial Real Estate Investment Trust (TNT.UN-T) announced a $70-million bought-deal financing. It has an agreement with a syndicate of underwriters led by CIBC Capital Markets and Raymond James Ltd., that will sell 10.6 million trust units of the REIT for $6.60 each.
Daniel Drimmer, the REIT’s CEO, will be purchasing approximately $1-million of units as a part of the offering, the REIT stated.
The REIT said the net proceeds will fund the potential acquisition of three "high-quality" office properties from three arm’s length vendors located in the Greater Toronto Area, Ontario and Calgary.
In addition to the offering, the institutional vendor of one of the potential acquisition properties has agreed to accept approximately $15-million of trust units as partial consideration of the purchase price of the property, subject to TSX approval, the REIT stated.
It said the potential acquisition properties have a combined purchase price of approximately $222.5-million.
TPG Pace Holdings Corp. (TPGH-N) and Accel Entertainment, Inc. issued a release late Tuesday stating that Clairvest Group Inc. (CVG-T) and Clairvest Equity Partners V “have voluntarily dismissed the lawsuit they filed in the Circuit Court of Cook County, Illinois (Chancery Division) against Accel and certain shareholders of Accel, without any consideration.”
TPG Pace Holdings, a special-purpose acquisition company sponsored by an affiliate of TPG, proposed an acquisition of Accel earlier this summer. "Following the consummation of the transaction, TPG Pace will be renamed Accel Entertainment and its shares will remain listed on the New York Stock Exchange and trade using the ticker ACEL," the company stated.
Reitmans (Canada) Ltd. (RET.A-T) reported sales for the second quarter ended Aug. 3 were $232.8-million, as compared with $248.8-million a year ago. “The decrease of $16-million is primarily attributable to a net reduction of 45 stores, lower than anticipated sales and unseasonable weather conditions that were prevalent during the early portion of the second quarter,” this year, the company stated.
Comparable sales, which include e-commerce sales, decreased 1.9 per cent, "primarily due to store traffic being down 3.2 per cent for the second quarter," it added.
Its net loss $100,000 or nil per share as compared with earnings of $10-million or 16 cents a year ago. Adjusted EBITDA was $27.4 million, as compared with $21.4-million a year ago.
The company said sales for the four weeks ended Aug. 31 decreased 7.1 per cent, while comparable sales decreased 3.6 per cent.