Cannabis Market Sees Pickup in M&A Activity as Canada Legalizes Its Use

For the week ending October 19, capital markets saw a total of 32 M&A transactions with total capital flows of $19.65 billion. Eight deals were disclosed between $100 million and $500 million, the highest of any category. The tech, media, and telecommunications (TMT) vertical had $2.8 billion capital invested last week, continuing the strong run of deal activity in the space. The Rocky Mountain region was particularly active last week, with five deals for total disclosed capital of $7.9 billion. The following are a selection of transactions from last week in Skyline’s core industry focuses:

• SendGrid (NYS: SEND), a Denver-based email marketing platform, has reached an agreement to be acquired by Twilio (NYS: TWLO) for just shy of $2 billion. Twilio is a cloud-based communications platform that enables businesses to embed phone, messaging, and VoIP communications into their application software. The acquisition will make SendGrid a wholly-owned subsidiary and allows Twilio to quickly expand into email communication services.

• Marijuana firm iAnthus Capital announced a $638 million deal for the U.S. assets of Toronto’s MPX Bioceutical Corp, marking the first U.S. public-to-public acquisition in the marijuana industry. The acquisition will make iAnthus one of the largest players in the U.S. marijuana market, with a footprint in 10 states. This is also the third deal in the U.S. cannabis market this week as big players in the young industry are competing to gain market share.

• Novartis (NYS: NVS), a Swiss pharmaceutical giant, is set to acquire Endocyte (NAS: ECYT) for $2.1 billion cash. Endocyte, headquartered in West Lafayette, Indiana, specializes in radiopharmaceuticals, a new class of drugs that carries radioactive treatment directly to the cancer cells in the body. The deal will add a line of prostate cancer treatments to Novartis’s existing line of radiopharmaceuticals that target gut and pancreatic cancers.

• Canopy Growth (NYS: CGC) said last Monday that it agreed to acquire Colorado-based medical marijuana research firm Ebbu for $19.2 million and 6.2 million Canopy shares. Ebbu specializes in the purification and study of cannabinoids (CBD) for product development. Canopy was the first publicly traded U.S. marijuana firm and specializes in the marketing of medical marijuana products, including a potential for CBD-infused beer, to foreign markets.
  

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• Oracle (NYS: ORCL) has entered a definitive agreement to acquire cloud startup goBalto. Based in the Bay Area, goBalto is a cloud-based study startup software designed for the global life sciences industry. The company delivers solutions to accelerate clinical trials by streamlining and automating the setup of clinical research sites and trials.