Organigram garners ISS support for Sanity transaction

Executive Summary

• Institutional Shareholder Services (ISS) has recommended that Organigram Global Inc. shareholders vote in favor of the proposed acquisition of Sanity Group GmbH, citing strong strategic rationale, credible valuation, and positive market reaction.
• The acquisition involves a total upfront consideration of €113.4 million (€80M cash + €33.4M in Organigram shares) plus contingent earnouts of up to €113.8 million, representing a 71.4% premium to Organigram's unaffected share price.
• The transaction is scheduled for approval at Organigram's Annual General and Special Meeting on March 30, 2026, with the Board unanimously recommending approval.

Key Details

• ISS Recommendation: ISS issued a report on March 14, 2026, recommending shareholders vote for the ordinary resolution to approve the indirect acquisition of Sanity Group GmbH.
• Strategic Rationale: ISS highlighted benefits including increased scale, geographic diversification, improved market presence, a stronger balance sheet, and enhanced cash flow generation.
• Valuation & Fairness: ISS found the valuation credible, supported by an independent fairness opinion from BMO Nesbitt Burns Inc. confirming the consideration is fair to Organigram.
• Market Reaction: Organigram shares rose on the day of the announcement and continued to outperform the S&P/TSX Composite Index and S&P/TSX Composite Pharmaceuticals Index as of March 11, 2026, suggesting elevated risk of non-approval.
• Financing Signal: A connected private placement financing by a wholly owned subsidiary of British American Tobacco PLC (BAT), Organigram's largest shareholder, was completed at a meaningful premium to market price, signaling strong institutional confidence.
• Transaction Consideration:
  • Sanity shareholders receive a deemed value of $3 per share.
  • Total upfront consideration: €113.4 million (€80 million cash + €33.4 million in Organigram common shares).
  • Contingent earnout: Up to €113.8 million tied to Sanity's financial performance over the 12-month period following closing.
  • Premium: 71.4% to the closing price of Organigram's common shares on the last unaffected trading date prior to announcement.
• Board Support: The independent members of Organigram's board unanimously approved the transaction (interested directors abstained). The Board recommends shareholders vote for the transaction resolution.
• Meeting Details:
  • Date: Monday, March 30, 2026, at 10 a.m. Toronto time.
  • Location: 333 Bay St., Suite 3400, Toronto, Ont.
  • Audio Conference: Available for listening only (no voting) via dial-in numbers provided in the release.
  • Voting Deadline: 10 a.m. Toronto time on Thursday, March 26, 2026.
• Other Meeting Matters: Shareholders will also vote on:
  • Election of 10 director nominees.
  • Appointment of PricewaterhouseCoopers LLP as auditor.
  • Reapproval of all unallocated awards under the omnibus equity incentive plan.
  • The Board recommends voting for all these items.

Notable Quotes

• ISS Report: "The strategic rationale for the deal makes sense and the combined company should be able to harness benefits from increased scale, diversification, improved market presence, a stronger balance sheet and cash flow generation. The connected financing being done at a meaningful premium by OGI's largest shareholder signal strong institutional confidence and long-term strategic alignment. The valuation appears credible, and the company has outperformed broad global ...benchmark indices since the unaffected date and the announcement, suggesting elevated non-approval risk."
• ISS Key Factors:
  • "Compelling strategic rationale: ISS concluded that the acquisition of Sanity positions the combined company to benefit from increased scale, meaningful geographic diversification, improved market presence, a stronger balance sheet and enhanced cash flow generation."
  • "Strong institutional confidence: The connected private placement financing by a wholly owned subsidiary of British American Tobacco PLC (BAT)... was cited by ISS as a signal of strong institutional confidence and long-term strategic alignment with the transaction."
  • "Credible valuation: ISS found the valuation of Sanity to be credible, supported by an independent fairness opinion provided by BMO Nesbitt Burns Inc..."
  • "Positive market reaction: ISS noted that Organigram shares rose on the day of announcement and had further increased as at March 11, 2026... ISS indicated that this favourable market reaction suggests elevated risk if the transaction is not approved."
  • "Unanimous board support: The independent members of Organigram's board of directors unanimously approved the transaction..."