Tilray’s (TLRY) reverse merger with Aphria in April 2021 resulted in Aphria’s historical financial statements becoming the historical financial statements of Tilray. The deal makes certain comparisons difficult— the latest quarter’s share count nearly doubled YoY as the merger as the quarter ended February 28, 2022 and the merger wasn’t completed until April 2021.

Even so, we can still evaluate, at least in the short term, whether the serial acquirer is generating a return for investors. Tilray uses its stock as currency, issuing at least 23.2 million shares for three acquisitions in the past year. In its latest 10-Q, Tilray revealed the financial impact a recent acquisition would have had if it were included in its financials prior to the deal closing.

In December 2021, Tilray acquired Breckenridge Distillery for 12.5 million shares. Tilray’s revenue would have been higher by approximately $6 million and $18 million for the three and nine months ended February 28, 2021, if the acquisition had taken place on June 1, 2020. Tilray’s net income would have been lower by approximately $1,500 and $4,500 for the aforementioned three and nine months.

On an annual run rate— all else being equal— Breckenridge generates an annual net loss of $6 million on sales of $24 million. The acquisition price of $114 million indicates Tilray paid 4.75x sales for the unprofitable brewery.

Below are the sales multiples for publicly traded spirits companies:

—DEO: 6x
—EAST: 1.1x
—BF.B: 7.3x
—SAM: 2.2x
—STZ: 5.1x
—MGPI: 3.3x

If we exclude EAST, the average is 4.78, which suggests— at least as a pricing exercise— the Breckenridge acquisition price is in line with current multiples.

Goodwill accounted for just 12.9% of the Breckenridge transaction. In all, goodwill now represents 48% of Tilray’s total assets.