Neighbourly Pharmacy, which went public this year, has launched a secondary and treasury bought deal offering that will generate about C$130 million in proceeds. The secondary offering, which will generate about C$100 million, will see the ownership stake of Persistence Capital Partners drop to about 51.9 percent from about 63.1 percent, assuming no exercise of the greenshoe option. Neighbourly is a Toronto-based network of community pharmacies.
TORONTO, Oct. 07, 2021 (GLOBE NEWSWIRE) — Neighbourly Pharmacy Inc. (“Neighbourly” or the “Company”), Canada’s largest and fastest growing network of community pharmacies, today announced that the Company, along with certain entities affiliated with Persistence Capital Partners (collectively, the “Selling Shareholders”), have entered into an agreement with Scotiabank and RBC Capital Markets (the “Underwriters”) pursuant to which the Underwriters have agreed to purchase an aggregate of 4,230,000 common shares (the “Common Shares”) of Neighbourly, at a price of $30.75 per Common Share, on a bought deal basis, for aggregate gross proceeds of approximately $130 million to the Company and the Selling Shareholders.
Under the agreement, 977,000 Common Shares will be issued from treasury by Neighbourly for gross proceeds to the Company of approximately $30 million (the “Treasury Offering”) and an aggregate of 3,253,000 Common Shares will be offered by the Selling Shareholders for aggregate gross proceeds to the Selling Shareholders of approximately $100 million (the “Secondary Offering,” or together with the Treasury Offering, the “Offering”).
The Selling Shareholders have also granted the Underwriters an over-allotment option, exercisable for a period of 30 days from the date of the closing of the Offering, to purchase up to an additional 15% of the Common Shares to be sold pursuant to the Offering at the offering price to cover over-allotments, if any, and for market stabilization purposes.
The net proceeds of the Treasury Offering will be used to strengthen Neighbourly’s financial position and allow the Company to continue to make accretive acquisitions at a similar pace to historical levels. Net proceeds from the Secondary Offering will be paid directly to the Selling Shareholders. Neighbourly will not receive any of the proceeds of the sale of Common Shares by the Selling Shareholders.
The Common Shares distributed pursuant to the Offering and, if applicable, the over-allotment option, will be offered in all provinces and territories of Canada by way of a prospectus supplement (the “Prospectus Supplement”) to a short form base shelf prospectus (the “Final Base Shelf Prospectus”). The Common Shares distributed pursuant to the Offering will also be offered in the United States by way of private placement to “qualified institutional buyers” in reliance upon the exemption from registration provided by Rule 144A under the U.S. Securities Act of 1933, as amended (the “1933 Act”).
Neighbourly will file a preliminary short form base shelf prospectus (the “Preliminary Base Shelf Prospectus”) no later than October 12, 2021. Such Preliminary Base Shelf Prospectus, which remains subject to the review of the Canadian securities regulatory authorities, will qualify the distribution by way of prospectus in Canada of up to $500 million of common shares, debt securities, preferred shares, warrants, subscription receipts, units, or any combination thereof, during the 25-month period during which the Final Base Shelf Prospectus will be effective. Concurrent with the filing of the Preliminary Base Shelf Prospectus, the Company will also file a Preliminary Prospectus Supplement with Canadian securities regulatory authorities in order to qualify the Common Shares to be distributed pursuant to the Offering as described above. The Offering is expected to close on or about October 25, 2021 and is subject to certain customary conditions including, but not limited to, the receipt of all regulatory approvals including the approval of the Toronto Stock Exchange.
Prospective investors should read the Preliminary and Final Base Shelf Prospectus, Prospectus Supplement and the documents incorporated by reference therein before investing in the Common Shares. When available, these documents may be accessed for free on SEDAR at www.sedar.com.
Persistence Capital Partners currently owns or controls, directly or indirectly, 21,100,922 Common Shares representing approximately 63.1% of the currently issued and outstanding Common Shares. Following the closing of the Offering (assuming no exercise of the over-allotment option), Persistence Capital Partners will own or control, directly or indirectly, 17,847,922 Common Shares, representing approximately 51.9% of the issued and outstanding Common Shares.
As the Canadian pharmacy industry begins to recover from the impact of the pandemic, Neighbourly has continued to execute upon its strategy of growth by acquisition, and its acquisition pipeline remains robust. This strategy drove the Company’s financial results for the second quarter of fiscal 2022, which will be reported in detail on October 26, 2021. Based on currently available preliminary information, the Company anticipates reporting Revenue of approximately $90.7 million, Net Loss of approximately $3.4 million and Adjusted EBITDA1 of approximately $10.0 million for the second quarter of fiscal 2022, which would represent improvements of 54%, 12.4% and 52%, respectively, when compared to the second quarter of fiscal 2021. Adjusted EBITDA for the second quarter of fiscal 2022 is expected to include corporate, general, and administrative costs of approximately $3.6 million, which reflect both the Company’s accelerated pace of acquisition and increased costs associated with becoming a public company. Neighbourly anticipates that its operating leverage will continue to improve as the Company continues to expand its network. As reported earlier today, Neighbourly announced the acquisition of 21 additional pharmacy locations which are expected to close within Neighbourly’s third fiscal quarter, pending customary regulatory approvals.
No securities regulatory authority has either approved or disapproved the contents of this news release. The securities offered pursuant to the Offering have not been, nor will they be, registered under the 1933 Act and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States or to, or for the account or benefit of, U.S. persons. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful.
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 167 locations (on a pro forma basis, after giving effect to recently announced proposed acquisitions), reinforcing the Company’s reputation as the industry’s acquirer of choice.