Northwire Canada EditionSaturday, July 11, 2026
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Financings Routine −

Auxly Provides Update on Stalking Horse Bid for Ayurcann

Auxly M&A Bid Fails as Core Business Strengthens

Executive Summary
  • On April 13, 2026, Auxly announced its stalking horse bid for Ayurcann Holdings Corp.'s assets was not selected as the winning bid and is now designated the "Back-Up Bid."
  • The $2.0 million debtor-in-possession (DIP) financing provided by Auxly remains in place with 12% interest and a 2.0% upfront commitment fee, secured by a super-priority charge.
  • If the successful bidder fails to close by May 15, 2026, Auxly will automatically become the winning bidder at its original amount and be repaid the DIP facility plus break fees.
  • CEO Hugo Alves characterized the bid as "opportunistic" and emphasized a focus on organic growth and expected significant free cash flow in 2026.
Material Impact
  • The news represents a setback for Auxly's M&A strategy but is not existential given the company's strong balance sheet.
  • Financial exposure is limited to the $2.0 million DIP loan, which is small relative to the $32.3 million cash position reported in Q4 2025.
  • The "Back-Up Bid" status provides downside protection via break fees and repayment guarantees if the primary deal fails.
  • Core business fundamentals remain robust with FY2025 revenue up 24% and Adjusted EBITDA up 64%, suggesting the company does not rely on this acquisition for survival.
  • Market sentiment may react negatively to the failed bid, but the operational performance offsets the M&A disappointment.
XLY · Price
Company Overview
  • Auxly Cannabis Group Inc. is a Canadian licensed producer focused on dried flower, pre-rolls, and vapes.
  • Flagship Brand: "Back Forty" ranked as the #1 cannabis brand in Canada (2025).
  • Market Position: Ranked #3 among Canadian licensed producers by market share.
  • Facilities: Primary production facility in Leamington, Ontario; expansion into Quebec distribution completed in Q2 2025.
  • Strategy: Focus on profitable organic growth and selective M&A to enhance brand portfolio and export capabilities.
Read the original news release →

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