Complete Press Release:
Aphria Announces Conclusion of Specific Committee Assessment
Specific Committee concludes that acquisition of LATAM assets was inside an acceptable variety as compared to equivalent acquisitions by competitors
Assessment also involved independent physical inspection of operating LATAM assets, confirming facilities, licenses and employment
Delivers suggestions for additional governance enhancements
Organization supplies update on executive transitions
Leamington, Ontario – February 15, 2019 – Aphria Inc. (“Aphria” or the “Organization”) (TSX: APHA and NYSE: APHA) right now announced that its Board of Directors (the “Board”) has accepted and regarded as the report of the unique committee of independent directors (the “Specific Committee”), which reviewed the allegations created against the Organization in respect of the Company’s previously completed acquisition of LATAM Holdings Inc. (the “Acquisition”).
Specific Committee Assessment of LATAM Assets
In accordance with its mandate announced on December six, 2018, the Specific Committee completed its overview of the Acquisition with the help of independent legal advisor Lenczner Slaght Royce Smith Griffin LLP, independent forensic advisors Deloitte LLP and independent monetary advisors Duff & Phelps Canada Restricted. The Specific Committee’s function integrated a overview of the Company’s books and records and other documents, meetings with particular monetary and legal advisors to the Organization and, exactly where accessible, particular members of senior management and directors of the Board.
The following is a summary of the principal findings of the Specific Committee focused on the LATAM assets:
- The assets acquired pursuant to the Acquisition in Argentina, Colombia and Jamaica have been verified to be in spot and continued to create according to the Company’s enterprise strategy considering that the Acquisition, constant with Aphria’s prior public disclosure
- Complete, in-particular person internet site testimonials have been performed by advisors to the Specific Committee, which confirmed the existence of the LATAM assets and operations in every of Colombia and Jamaica, as nicely as function to confirm the contractual and permitting arrangements in Argentina and
- The consideration paid for the assets bought in the Acquisition was determined to be inside an acceptable variety as compared to equivalent acquisitions by competitors, be it close to the best of the variety of observable valuation metrics. In the standard course of enterprise and on an annual basis, constant with the needs below International Economic Reporting Requirements, the Organization will assess the carrying worth of the acquired assets.
Specific Committee Assessment of Governance Procedures
As previously disclosed, the Acquisition was authorized by independent directors right after acquiring a third-celebration fairness opinion, with the non-independent directors recusing themselves from the deliberations and voting. Primarily based on additional data accessible to the Specific Committee, it seems that particular of the non-independent directors of the Organization had conflicting interests in the Acquisition that have been not completely disclosed to the Board.
As a outcome, the Specific Committee suggested places of improvement to position Aphria as a leader in corporate governance and management practices, which the Board has unanimously agreed to adopt. They incorporate:
- Board and management: overview board composition to make certain that the majority of the board consists of independent directors and provide ongoing instruction for directors and senior management on corporate governance matters
- Corporate governance: make and implement a policy to address frequent directorships and executive positions and enforce controls to assess and mitigate danger with respect to acquisitions, transactions and material contracts
- Strategic arranging and transaction approach: establish and implement a formal approach with respect to strategic transactions
- Conflicts of interest: adopt very best practices to handle prospective conflicts of interest such as disclosure of all direct or indirect ownership interests that could give danger to prospective conflicts of interest to the Independent chair and a overview of such prospective conflicts and ownership interests on a frequent basis and
- Reliance on independent professionals and advisors: confirm independence and qualifications of external professionals and advisors prior to engagement on transactional and other matters.
“The Board and I are grateful for the Specific Committee’s diligence and independence in undertaking its overview,” mentioned Irwin D. Simon, Aphria’s independent Board Chair. “The constructive conclusion to this lengthy approach has strengthened the Organization. Although I was not portion of Aphria at the time of the LATAM acquisition, the Specific Committee’s findings give me and the Board complete self-assurance that it was executed at an acceptable worth and is constant with the Company’s international development tactic.”
Added Simon, “With this behind us, we are committed to completely concentrate on our vibrant future and producing worth for all Aphria shareholders. Aphria is committed to the highest levels of governance and transparency, with a Board that, upon the appointment of a permanent CEO, will be completely composed of independent directors, from a majority previously. I’m optimistic that the Specific Committee’s additional suggestions for enhancing our corporate governance will serve us nicely in the future.”
In addition, as portion of its overview of the Company’s operations, the Board affirmed that primarily based on the most current Well being Canada inspection, Aphria’s Leamington facility and operations are in compliance with the needs of the Cannabis Act and the cannabis goods cultivated from this facility are made in accordance with stringent excellent assurance and excellent handle going beyond “Good Item Practices”.
Executive Transition Update
As previously press released on January 11, 2019, Vic Neufeld and Cole Cacciavillani have completed a accountable transition strategy and productive March 1, 2019 will be retiring from the Organization (such as in their capacity as directors). Mr. Neufeld and Mr. Cacciavillani will continue to apply their information and knowledge as unique advisors to each the Chair and Jakob Ripshtein, President. Mr. Simon will be the interim Chief Executive Officer, functioning closely with Mr. Ripshtein, till the Board identifies a permanent CEO. In addition, John Cervini will step down as a director of the Organization productive as of March 1, 2019. Mr. Cervini will stay in a non-executive operational capacity inside Aphria. The Nomination Committee is undertaking a approach to recognize appropriate candidates to fill these vacancies on the Board.
Aphria is a top international cannabis corporation driven by an unrelenting commitment to our persons, solution excellent and innovation. Headquartered in Leamington, Ontario – the greenhouse capital of Canada – Aphria has been setting the common for the low-price production of protected, clean and pure pharmaceutical-grade cannabis at scale, grown in the most all-natural situations attainable. Focusing on untapped possibilities and backed by the most up-to-date technologies, Aphria is committed to bringing breakthrough innovation to the international cannabis industry. The Company’s portfolio of brands is grounded in expertly-researched customer insights created to meet the wants of just about every customer segment. Rooted in our founders’ multi-generational knowledge in industrial agriculture, Aphria drives sustainable lengthy-term shareholder worth via a diversified strategy to innovation, strategic partnerships and international expansion, with a presence in extra than 10 nations across five continents.