Aphria Inc. (TSX:APH) entered into a definitive arrangement agreement to acquire the remaining 93.5% stake in Nuuvera Inc. (TSX-V:NUU) from Fastforward Innovations Limited (AIM:FFWD) (‘Fastforward') and other shareholders for approximately CAD 610 million on January 28, 2018. The transaction values Nuuvera at approximately CAD 826 million and will be conducted by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario). Under the terms of the arrangement agreement, Aphria will acquire all the issued and outstanding common shares (on a fully-diluted basis) of Nuuvera for a total consideration of CAD 8.5 per Nuuvera share. Nuuvera shareholders will receive CAD 1 in cash plus 0.3546 of an Aphria share for each Nuuvera share held. Aphria expects to issue up to approximately 34 million shares in connection with the transaction, representing approximately 20.8% of the currently issued and outstanding shares of Aphria on a non-fully diluted basis. Nuuvera shall lend a loan amount to Aphria, and Aphria shall deliver Nuuvera a duly issued and executed demand promissory note to evidence such loan and the full amount of such loan shall be immediately deposited by Nuuvera at the direction of Aphria with the depositary to be held in a segregated trust account by the depositary for the purpose of paying the cash consideration for the common shares. Upon closing of the arrangement, Nuuvera shareholders will own approximately 14.8% of the combined company, assuming the closing of Aphria's previously announced transaction with Broken Coast Cannabis Ltd. Post-acquisition, the common shares of Nuuvera will be delisted from the TSX-V. On February 19, 2018, the arrangement agreement was amended to reduce the consideration payable to Nuuvera shareholders to CAD 0.6 in cash plus 0.3546 of an Aphria share for each Nuuvera share.

The arrangement agreement between Nuuvera and Aphria provides for, among other things, a non-solicitation covenant on the part of Nuuvera, as well as a provision that entitles Nuuvera to consider a superior proposal in certain circumstances, and a right in favor of Aphria to match any superior proposal. Nuuvera is not permitted to terminate the arrangement agreement as a result of a superior proposal. If the arrangement agreement is terminated in certain circumstances, including if Nuuvera enters into a definitive agreement with respect to a superior proposal, Aphria is entitled to a break-fee payment of CAD 25 million. Contemporaneously with the effective time, the Board of Directors of Aphria shall appoint one individual designated by Nuuvera and approved by Aphria, acting reasonably, to the Board of Directors of Aphria. The completion of the arrangement is subject to certain customary conditions for the benefit of Aphria, including Nuuvera and its subsidiaries, on a consolidated basis, having a minimum amount of unrestricted cash to be applied as a loan towards the satisfaction of the cash consideration. The deal remains subject to the conditional approval of the TSX, anti-trust approvals, Aphria should deposit with the depository in escrow the aggregate share consideration to be paid pursuant to the arrangement, third party approvals, dissent rights have not been exercised with respect to more than 5% of the issued and outstanding common shares, applicable regulatory approvals and the satisfaction of certain customary closing conditions. The transaction is also subject to the approval of the Superior Court of and is subject to the approval of two-thirds of the votes cast by Nuuvera shareholders (as well as a majority of the "minority" shareholders of Nuuvera). Aphria has secured irrevocable hard lock-ups from shareholders holding approximately 57% of the currently outstanding Nuuvera shares that they will vote in favor of the transaction. The Board of Directors of Nuuvera unanimously recommends that Nuuvera shareholders vote in favor of the resolution to approve plan of arrangement, which is expected to be subject to a special meeting of shareholders held in March 2018. The transaction has been unanimously approved by the Board of Directors of each of Aphria and Nuuvera and is supported by the management teams of both companies as well as significant shareholders of Nuuvera.

Aphria had secured irrevocable hard lock-ups from Nuuvera shareholders representing approximately 57% of the then current outstanding Nuuvera shares to vote in favour of the arrangement agreement. In connection with the amendment, Aphria had sought and received the consent from certain of the lock-up shareholders that, together with Nuuvera shares already owned by Aphria, represent over 65% of the current outstanding Nuuvera shares, and over 57% of the minority shareholders, to permit the reduction of consideration under the arrangement agreement. Aphria has secured irrevocable voting support agreements from shareholders of Nuuvera to vote in favour of the arrangement. Collectively, the Nuuvera Shares subject to these support agreements represent, together with the Nuuvera shares already owned by Aphria, approximately 69% of the currently issued and outstanding Nuuvera shares, and over 62% of the minority shareholders. In connection with the amendment, the Board of Directors of Aphria received an opinion from its financial adviser, Cormark Securities, that the revised consideration to be offered by Aphria in respect of the arrangement, as amended by the amendment, is fair, from a financial point of view, to Aphria. The special meeting of Nuuvera shareholders to approve the transaction will be held on March 20, 2018. On March 20, 2018, majority of the shareholders of Nuuvera approved the transaction at the special meeting of shareholders. The transaction is expected to close in April 2018. The transaction is expected to be accretive to Aphria on an earnings basis in its first full fiscal year.

Clarus Securities Inc. provided strategic advice on the transaction. Stoic Advisory Inc. acted as financial advisor and Rishi Dhir, Khalfan Khalfan, Curtis Cusinato, Sean Vanderpol, Matt Hunt, Mike Devereux, Rachel Wasserman, Aggrey Semi, Dalton Turner, Patricia Joseph, Dean Kraus, Jonathan Willson, and Mike Kilby from Stikeman Elliott LLP acted as the legal advisor for Aphria Inc. Cormark Securities Inc. acted as fairness opinion provider to the Board of Directors of Aphria. Canaccord Genuity Corp. acted as financial advisor and Walied Soliman, Paul Fitzgerald, Bruce Sheiner, Jacob Cawker, Jeffrey Spiegel, Trevor Zeyl, Sean Williamson, Sam Zadeh, Barry Segal, Sara Zborovski, Anne Gallop, Paul Macchione and Brian Chau of Norton Rose Fulbright Canada LLP acted as legal advisors to Nuuvera. Canaccord Genuity Corp. acted as fairness opinion provider to the special committee of the Board of Directors of Nuuvera. James Biddle and Roland Cornish of Beaumont Cornish Limited acted as financial advisors to Fastforward. Ed McDermott of Optiva Securities Limited acted as broker for Fastforward. TSX Trust Company acted as depository to Aphria in the transaction. John Emanoilidis, Frazer House and Kevin Armitage of Torys LLP acted as legal advisor to Canaccord Genuity.