- Committed Debt Financing Secured;
Exclusivity Extended to January 15,
2024 -
TORONTO, Nov. 13,
2023 /CNW/ - Neighbourly Pharmacy
Inc. ("Neighbourly" or the "Company") (TSX: NBLY),
Canada's largest and fastest
growing network of independent pharmacies, provides an update
regarding the previously announced letter of intent entered into
with an affiliate of Persistence Capital Partners (collectively,
and together with their affiliated funds, "PCP"), in respect
of a transaction (the "Proposed Transaction") whereby a
newly-formed entity controlled by PCP would acquire all of the
common shares (the "Common Shares") in the capital of the
Company, other than those Common Shares already owned by PCP or its
affiliates, at a purchase price of $20.50 per Share, payable in cash.
As previously announced, the Proposed Transaction would be
financed via equity and debt financing. PCP has now received
commitments for a fully underwritten credit facility in an amount
of $650 million co-led by The Bank of
Nova Scotia and RBC Capital
Markets. PCP expects to use approximately $450 million of such amount to finance the
Proposed Transaction. Since the execution of the letter of intent
on October 2, 2023, PCP has continued
to advance with its sources of equity financing and expects to
conclude those arrangements over the near term.
The Company has agreed to extend the previously announced
exclusivity period granted to PCP to January
15, 2024 to complete negotiation of a definitive agreement
for the Proposed Transaction and to allow PCP to finalize its
equity financing arrangements for the Proposed
Transaction.
The entering into of a definitive agreement concerning the
Proposed Transaction remains subject to, among other things, as at
the time the definitive agreement is entered into, (i) PCP having
secured fully committed equity financing; (ii) the negotiation and
execution of a definitive agreement for the Proposed Transaction on
terms satisfactory to PCP and Neighbourly; (iii) receipt from TD
Securities Inc. ("TD"), financial advisor and independent
valuator to the committee of independent directors (the
"Transaction Committee") formed by the Board of Directors of
the Company (the "Board"), of an updated formal valuation of
the Common Shares initially orally delivered by TD to the
Transaction Committee on October 2,
2023 (the "Formal Valuation"); and (iv) receipt from
TD of an updated fairness opinion initially orally delivered by TD
to the Transaction Committee on October 2,
2023 (the "Fairness Opinion"), containing a fairness
conclusion consistent with the Fairness
Opinion. The consummation of the Proposed
Transaction will be subject to various conditions customary for
transactions of this nature, including, among others,
(i) receipt by the Company and PCP
of any required regulatory, court and/or stock exchange
approvals; and (ii) the approval of the Proposed Transaction at a
special meeting of shareholders of the Company (the "Special
Meeting") entitled to vote on the Proposed Transaction
(including a "majority of the minority" vote of the shareholders
excluding for this purpose the votes of Shares held or controlled
by PCP and any other persons described in
items (a) through (d) of Section 8.1(2) of Multilateral Instrument
61-101 – Protection of Minority Security Holders in Special
Transactions).
The Proposed Transaction is expected to close in the first
calendar quarter of 2024, subject to the above listed conditions
and other customary closing conditions. The terms and conditions of
the Proposed Transaction will be disclosed in greater detail in a
management information circular for the Special Meeting that is
expected to be mailed to the Company's shareholders following the
execution of the definitive agreement for the Proposed
Transaction. Copies of the definitive agreements and
of the management information circular for the Special Meeting will
be filed with Canadian securities regulators and will be available
on the SEDAR+ profile of Neighbourly at www.sedarplus.com.
Neighbourly's shareholders are urged to read those and other
relevant materials when they become available.
While the Board, after having received the unanimous
recommendation of the Transaction Committee, has agreed (with
Stuart M. Elman, Chair of the Board
and Managing Partner of PCP, recusing himself from the meeting) to
extend the exclusivity period and to continue pursuing the Proposed
Transaction, neither the Transaction Committee nor the Board has
approved the Proposed Transaction. There can be no assurance that
Neighbourly and PCP will enter into a definitive agreement for the
Proposed Transaction or that the Proposed Transaction will occur as
proposed or at all. Neither the Company nor the
Transaction Committee expect to make
further public comment regarding the matters contemplated herein
until a definitive agreement for the Proposed Transaction is
reached or the Proposed Transaction is abandoned.
Forward Looking
Information
This news release
contains "forward-looking
information" and "forward-looking statements"
(collectively, "forward-looking information") within the meaning
of applicable securities laws. This information
includes, but is not limited to, statements concerning our
objectives, our strategies to achieve those objectives, as well as
statements made with respect to management's beliefs, plans,
estimates, projections and intentions, and similar statements
concerning anticipated future events, results, circumstances,
performance or expectations that are not historical facts.
In some cases, forward-looking information can
be identified by the use of forward-looking terminology such
as "expects", "estimates",
"outlook",
"forecasts", "projection", "prospects", "intends",
"anticipates", "believes", or variations of such words and phrases
or statements that certain actions,
events or results "may", "could",
"would", "might", "will", "will be taken", "occur" or "be
achieved". In addition, any statements that refer to expectations,
intentions, projections or other characterizations of
future events or circumstances contain
forward-looking information. Statements containing
forward-looking information are not historical
facts but instead represent
management's
expectations, estimates and projections
regarding future events or circumstances.
Forward-looking information in this news
release, which includes, among other things, statements relating
to the Proposed Transaction and timing
thereof, is necessarily based on a number of opinions, estimates
and assumptions that the Company
considered appropriate and reasonable as
of the date such
statements are made in light of its experience,
current conditions and expected future
developments.
Risks and uncertainties related to the Proposed
Transaction include, but are not limited to: failure of Neighbourly
and PCP to enter into a definitive agreement for the Proposed
Transaction on terms satisfactory to Neighbourly, or at all;
failure of PCP to secure equity financing on acceptable terms, or
at all; failure to keep the debt financing committed;
failure to complete satisfactory due diligence; failure of
Neighbourly and PCP to obtain the required shareholders and
regulatory approvals for, or satisfy other conditions to effect,
the Proposed Transaction; failure by TD to deliver an updated
Formal Valuation at the time the definitive agreement is entered
into; failure by TD to deliver an updated Fairness Opinion at the
time the definitive agreement is entered into; the risk that the
Proposed Transaction may involve unexpected costs, liabilities or
delays; the risk that, prior to or as a result of the completion of
the Proposed Transaction, the business of Neighbourly may
experience significant disruptions, including loss of clients or
employees due to transaction related uncertainty, industry
conditions or other factors; risks relating to employee retention;
the risk of regulatory changes that may materially impact the
business or the operations of Neighbourly; the risk that legal
proceedings may be instituted against Neighbourly; and risks
related to the diversion of management's attention from
Neighbourly's ongoing business operations.
Although we have attempted to identify important risk
factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other
risk factors not presently known to us or that we presently believe
are not material that could also cause actual results or future
events to differ materially from those expressed in such
forward-looking information. There can be no assurance that such
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. No forward-looking statement is a guarantee of future
results. Accordingly, you should not place undue reliance on
forward-looking information, which speaks only as of the date made.
The forward-looking information contained in this news release
represents the Company's expectations as of the date of this news
release (or as the date they are otherwise stated to be made) and
are subject to change after such date. However, the Company
disclaims any intention or obligation or undertaking to update or
revise any forward-looking information whether as a result of new
information, future events or otherwise, except as required under
applicable securities laws in Canada. All of the forward-looking information
contained in this news release is expressly qualified by the
foregoing cautionary statements.
About Neighbourly Pharmacy
Inc.
Neighbourly is Canada's
largest and fastest growing network of community
pharmacies. United by their patient first focus and their
role as essential and trusted healthcare hubs within their
communities, Neighbourly's pharmacies strive to provide
accessible healthcare with a personal touch. Since 2015,
Neighbourly has expanded its diversified national
footprint to include 292 locations, reinforcing the
Company's reputation as the industry's acquirer of
choice.
Advisors
TD Securities is acting as financial advisor and
independent valuator to the Transaction Committee, and McCarthy
Tétrault LLP is acting as independent legal advisor to the
Transaction Committee.
Scotiabank and RBC Capital Markets are acting as financial
advisors to PCP, and Stikeman Elliott LLP is acting as legal
advisor to PCP on the Proposed Transaction. Devon Park
Advisors is providing strategic advisory and capital raising
services to PCP.
SOURCE Neighbourly Pharmacy Inc.