Cannabis company Aurora Cannabis Inc (NYSE: ACB) said Wednesday it struck a new relationship with Nelson Peltz. The activist investor will serve as a strategic advisor with the aim of helping the company expand globally and better address major cannabis market segments.
What To Know
Peltz is known for his activist investor campaigns, and Aurora Chairman Michael Singer told CNBC he's "someone who proactively works with companies to maximize value for stakeholders."
Peltz doesn't have an "antagonistic approach" toward Aurora and will help the company in potential growth areas, especially consumer packaged goods, Singer said. Peltz brings an "incredible track record of successfully engaging with global companies" to the table, he said.
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Aurora has identified multiple growth areas it should be in a better position to address with the help of Peltz, Singer said. He named the beverage, cosmetics, health and wellness and pharmaceutical segments.
"There are a number of what we call market segments that we expect to operate in with one or many of these potential partners," Singer said.
Some of the biggest consumer packaged goods companies are now "starting to make a little noise" in the cannabis space, Singer said. Over time, this will shift to "a lot more noise about partnering with companies like Aurora," he said.
How Peltz Fits In
Peltz's expertise on pushing companies to focus on profitability and efficient asset allocation will "prove valuable" for Aurora's next stage of growth, Business Insider quoted Jefferies' Owen Bennett as saying in a research report.
The activist investor, Bennett said, should be able to help the cannabis company solve its most pressing issue: spending too much capital on too many assets.
"Peltz should support in ensuring assets are kept that yield most value," Bennett was quoted as saying. "Given his past, we would also suggest that his involvement should support in maximizing the route towards profitability."
Aurora's stock traded 12 percent higher to $8.92 per share at time of publication.
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Latest Ratings for ACB
| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Mar 2019 | Cowen & Co. | Initiates Coverage On | Outperform | |
| Feb 2019 | Jefferies | Initiates Coverage On | Buy | |
| Feb 2019 | Seaport Global | Initiates Coverage On | Neutral |
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