Australis Capital Announces Acquisitions, Names Terry Booth CEO

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Terry Booth, the co-founder and ex-CEO of Canada’s Aurora Cannabis, has been tapped to lead Australis Capital (AUSA), a Las Vegas-based cannabis investment firm that was once owned by the Edmonton-based marijuana producer.

In a pair of news releases issued last week, Australis said it would wholly acquire Nevada-based Green Therapeutics — a cannabis company founded by former MedMen president and Australis interim CEO Duke Fu — and purchase a 51% stake in greenhouse design company ALPS, formerly known as Aurora Larseen Projects.

Australis will pay Green Therapeutics shareholders about $7.8 million in a cash-and-stock transaction that is expected to close during the first quarter of 2021.

"Folding the entire GT portfolio into AUSA will provide us with the firepower and networks to take our brands across the nation," Fu said.

Meanwhile, Australis will spend $13.7 million in cash and stock for a 51% stake in ALPS, itself previously owned by Aurora.

“We anticipate that this transaction, upon its completion, will be game changing and immediately accretive, and marks the first and crucial step in the transformation of AUSA to become the Company it was always meant to be: a profitable and rapidly growing MSO,” said Fu.

Australis also agreed to make $24 million worth of milestone payments over six installments, beginning in 2022, if certain revenue and EBITDA targets are met, and secured an option to purchase the remaining 49% of the ALPS business for $14.3 million in cash or stock.

A condition of the transaction is that Booth, already an ALPS principal, be installed as CEO of Australis.

“Terry is a capital markets legend with the track record of building one of the preeminent companies in the cannabis industry,” said Fu. “He is driven by his passion for the medical benefits of cannabis and the right of adults to use cannabis recreationally.”

Once the deal is complete, Fu will assume the role of chief operating officer.

“I am very impressed with his deep knowledge of and passion for the industry, and I look forward to closely working with him to deliver on the promises made to our shareholders,” he said.

The announcement seemingly marks the end of a monthslong proxy battle between current and former executives.

A group called the “Concerned Australis Shareholders,” which included Booth, Fu and others, alleged last August that former Australis board members “categorically failed” to “provide oversight and to effectively communicate with shareholders.”

The heated dispute stemmed from the proposed acquisition of a casino fintech company called Passport Technology that was majority owned by then-Australis CEO Scott Dowty.

That deal would eventually be terminated, but not before the disgruntled investors began strategizing for the eventual takeover of the company.

In August, the group demanded a complete restructuring of the board. In October, Australis made changes to the board and appointed Harry DeMott as CEO.

Those moves did little to appease Booth and his group of dissident investors.

After several nasty public exchanges, the group led by Booth seized control of the company in December following an “overwhelming” number of shareholders opting to support a regime change.

“Our shareholders have spoken,” Fu said last month. “We are thankful for their support, and in response we have immediately commenced executing on the plans that earned us their support at the Special Meeting.”

In an interview with Cheddar, Booth said the deals unveiled last week, and other forthcoming announcements, will “show our shareholders that they made the right decision.”

It's worth noting that while Aurora Cannabis no longer has direct ownership of Australis, it does hold two warrants granting it the option to acquire an interest in the Nevada-based company if cannabis becomes federally legal in the U.S.

Recall that Booth stepped down as Aurora's CEO last February, resigned from the board last June, and has invested in the psychedelics sector.

Additional information about the Australis transactions is available in the news releases linked below.

Australis Enters Into Term Sheet to Acquire ALPs

Australis to Acquire Green Therapeutics, LLC


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