A roundup of some of the North American equities making moves in both directions
On the rise
Tilray Inc. (TLRY-T) erased early losses and sat higher after reporting a 43-per-cent rise in first-quarter revenue, driven by strong demand for cannabis after coronavirus-led lockdowns.
The world’s largest cannabis producer by sales said its revenue rose to US$168-million in the quarter ended Aug. 31 from US$117.49-million a year earlier. Net cannabis revenue jumped 38 per cent.
Cannabis products saw a massive rise in popularity this year as more people turned to it for relaxation during the months-long isolation caused by COVID-19, lifting sales of pot producers.
The company said it was on track for at least US$80-million in cost savings from its deal to merge with Aphria.
Tilray, which announced the deal in December, added that it had saved about US$55-million on a run-rate basis to date from the deal, with actual cash savings close to US$20-million.
Tilray’s net loss widened to US$34.6-million in the first quarter from US$21.74-million, as total expenses more than doubled.
TC Energy Corp. (TRP-T) gained after announcing a plan to join Nikola Corp. (NKLA-Q) to build and operate plants for hydrogen production to meet the electric-truck maker’s fuel supply needs of its vehicles.
Under the agreement, the two companies are planning to build their plants in the United States and Canada, the hydrogen fuel from which will be used to power Nikola’s Class 8 fuel cell electric vehicles (FCEVs) within the next five years.
Earlier in September, Nikola had signed a deal with Germany’s Bosch Group to build Bosch fuel-cell power modules at the U.S. vehicle maker’s facility in Coolidge, Arizona for two of its trucks powered by the FCEV technology.
Nikola, whose founder Trevor Milton was criminally charged with defrauding investors by lying to them about the company’s products and technology, had halved its forecast for annual deliveries in August due to supply chain issues.
Mirror, which Lululemon acquired last year, in a $500-million deal, is a mirror-like device that acts as a screen for displaying online fitness classes. It also has a camera users can turn on for feedback during livestreaming classes or personal training sessions with remote instructors. The device is already sold in more than 150 Lululemon stores in the United States, and the company indicated in June that it expects Mirror to generate US$250-million to US$275-million in sales this year.
Great-West Lifeco Inc. (GWO-T) rose after announcing a long-term strategic partnership with Power Corp.’s (POW-T) asset management arm, Sagard Holdings Inc., in which it gains a minority equity stake in subsidiary in Sagard Holdings Management Inc.
The deal includes the sale of EverWest Real Estate Investors LLC and EverWest Advisors LLC to the Montreal-based firm with Great-West committing to investing approximately US$2-billion to “support EverWest’s future growth”
The partnership includes capital commitments of up to a further approximately US$500-million by Great-West into certain Sagard funds.
Score Media and Gaming Inc. (SCR-T) was higher with the announcement its US$2-billion acquisition by Penn National Gaming Inc. (PENN-Q) has received approval from the Minister of Canadian Heritage under the Investment Canada Act.
Subject to approval by shareholders at a special meeting, the deal is expected to close on Oct. 19.
Richelieu Hardware Ltd. (RCH-T) was up after saying its third-quarter profit rose nearly 40 per cent compared with a year ago as sales also climbed higher.
The maker of specialty hardware and other products says profit attributable to shareholders was $38.7-million or 69 cents per diluted share for the quarter ended Aug. 31.
The result compared with a profit of $28.7-million or 50 cents per diluted share in the same quarter a year earlier.
Sales for the quarter totalled $373.3-million, up from $311.2-million a year ago.
Richelieu says sales in the manufacturers market totalled $318.8-million compared with $244.6-million a year ago, while sales to hardware retailers and renovation superstores stood were $54.5-million, down $12.1-million from a year ago.
The company says it has closed five acquisitions in North America since the start of the year and opened two distribution centres in the United States.
Colliers International Group Inc. (CIGI-T) was up on the premarket announcement of the acquisition of a controlling interest in Milan-based Antirion SGR S.p.A., one of the largest real estate investment management firms in Italy with assets throughout Western Europe.
Details of the transaction were not disclosed.
“Ofer Arbib, founder and CEO and his team will continue to lead the organization and will retain a significant equity interest in the firm going forward under Colliers’ unique partnership model,” the Toronto-based company said. “The firm will be rebranded as Colliers Global Investors shortly after closing. This investment further expands Colliers Global Investors’ growing platform in Europe and leverages its benefits for existing and new investors. The transaction is subject to customary closing conditions and is expected to close in the first quarter of 2022.”
The independent pharmacy operator said the deal will be funded from cash on hand, is consistent historical acquisition multiples and will be immediately accretive.
Concurrently, it announced a separate acquisition of a single independent pharmacy.
“Given Neighbourly’s accelerated pace of acquisition, as well as the increased costs associated with becoming a public company, the Company anticipates that its corporate, general, and administrative costs will increase to approximately $3.6 million for the second quarter 2022, while still demonstrating improved operating leverage as it continues to expand its pharmacy network,” it said.
“Within its current assets and diversified extensive resource base, the Company will continue to focus its efforts on growing the production of the metals expected to feed into the anticipated global infrastructure supply demands,” it said. “The increased focus will apply specifically to copper and steel-making products (zinc and iron ore), with the production of the precious metals as a valuable cost-credit byproduct.
“Furthermore, the Company has completed an actionable review of its assets and will consider appropriate further action over the Company’s portfolio of assets. This action could take the form of divestments, joint ventures or partnerships, and it could include assets such as the Cusi Silver Mine or exploration targets which lie outside the current operating areas.”
Sierra also announced the introduction of an annual dividend of 3 US cents per share.
Levi Strauss & Co. (LEVI-N) jumped as it beat third-quarter revenue and profit estimates, boosted by an uptick in demand for jeans from people refreshing their wardrobes as they returned to normal social life following easing pandemic restrictions.
The Dockers brand owner said its board had approved a US$200-million share repurchase plan. The company has a market capitalization of US$49.49-billion, according to Refinitiv data.
With schools and offices reopening and people even going on vacations, as cases of coronavirus infections trend down, many are splurging on new apparel.
Levi, which has been expanding at major retailers including Target Corp and Nordstrom Inc, has also benefited from a reopening of the economy in its European markets and investments in its direct-to-consumer business.
Analysts expect Levi to face less supply pressure than peers due to its minimal reliance on Vietnam, an apparel manufacturing hub that has seen several factories close due to COVID-19 outbreaks and lower usage of the congested West Coast port.
“We have taken pricing actions and believe we have pricing power to mitigate inflationary pressures,” Chief Financial Officer Harmit Singh said in a statement.
Net revenue for the company rose to US$1.50-billion from US$1.06-billion in the third quarter ended Aug. 29. Analysts on average had expected US$1.48-billion, according to IBES data from Refinitiv.
Excluding items, Levi earned 48 US cents per share, beating estimates of 38 US cents per share.
The company said it expects holiday-quarter net revenue growth of 20 per cent to 21 per cent from a year earlier, while analysts were expecting growth of 22 per cent.
Levi also said it expects fourth-quarter earnings per share to be between 38 US cents and 40 US cents per share, compared with analysts average expectation of 40 US cents per share.
Meredith Corp. (MDP-N) soared after agreeing to be acquired by IAC’s digital media arm Dotdash in a deal valued at about US$2.7-billion, bringing titles such as People, Allrecipes and Investopedia under one umbrella.
Shares of IAC (IAC-Q) also jumped on the news.
The combined company is to be called Dotdash Meredith and will be led by Dotdash top boss Neil Vogel, the companies said.
The deal will combine Meredith’s more than 40 brands including Better Homes & Gardens, Southern Living and InStyle magazines with Dotdash’s digital labels such as The Spruce, Byrdie and Brides.
In June, Meredith had accepted a revised proposal from broadcast firm Gray Television Inc to buy Meredith’s television stations business for about US$2.83-billion.
Dotdash will buy the remaining portion of Meredith, primarily its magazines unit National Media Group, in an all-cash transaction of US$42.18 per share.
On its own, Dotdash currently reaches about 100 million online consumers monthly and its collection of 14 media brands in health, finance and lifestyle are among the fastest growing media brands online. It is one of the rapidly expanding businesses in parent IAC’s portfolio.
Twitter Inc. (TWTR-N) rose after it said late Wednesday it has agreed to sell mobile ad company MoPub to AppLovin Corp for US$1.05-billion in cash, as the microblogging platform looks to focus more on advertisements on its own app and website.
MoPub, which generated about US$188-million in annual revenue for Twitter last year, allows companies to keep track of ad inventory in real time, similar to Google’s DoubleClick.
“The sale of MoPub positions us to concentrate more of our efforts on the massive potential for ads on our website and in our apps,” Twitter Chief Financial Officer Ned Segal said.
Twitter said on Wednesday it will focus on its core business by accelerating development of new products and features to achieve its goal of doubling its revenue in 2023 to US$7.5-billion.
The MoPub deal comes months after Apple updated its mobile operating system that powers iPhones and iPads to make it hard for digital advertisers, including social media platforms and mobile game developers, to track users on Apple mobile devices.
With files from staff and wires