TORONTO–(BUSINESS WIRE)–Greenbrook TMS Inc. (TSX: GTMS, NASDAQ: GBNH) (“Greenbrook” or the “Firm”), a number one supplier of Transcranial Magnetic Stimulation (“TMS”) remedy in the US, is happy to announce the closing of its previously-announced acquisition (the “Acquisition”) of Verify 5 LLC, a Delaware restricted legal responsibility firm (doing enterprise as “Success TMS”) (“Success TMS”). As well as, Greenbrook publicizes at this time that it and its subsidiaries have entered right into a credit score settlement for a US$75 million secured credit score facility (the “Credit score Facility”) with Madryn Asset Administration, LP (“Madryn”) and its affiliated entities.
Key Acquisition and Credit score Facility highlights:
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Including Important Working Scale, High-Line Development and Anticipated to Speed up the Path to Profitability
- The Firm believes the Acquisition of Success TMS’ 47 TMS facilities within the states of Florida, Pennsylvania, Illinois, New Jersey, Nevada and Wisconsin is extremely complementary to Greenbrook’s current administration areas.
- The Firm expects that the Acquisition has the potential so as to add greater than US$30 million in consolidated revenues to the mixed firm on a full-year foundation, representing important development over Greenbrook’s present fiscal 2021 revenues of roughly US$52 million.
- The Firm anticipates that close to time period post-Acquisition synergies might be able to produce EBITDA optimistic operations for the mixed firm and speed up the Firm’s timeline to profitability.
- The Firm believes it has the power to layer on its current Spravato® program throughout the Success TMS footprint to drive additional development.
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Recapitalization of the mixed enterprise by way of the Credit score Facility
- The Credit score Facility gives Greenbrook with fast entry of as much as US$55 million in time period loans and the potential to entry as much as a further US$20 million in loans solely for growth functions.
- The Firm believes the Credit score Facility sufficiently capitalizes the enterprise to serve its normal working capital wants and to execute on its development technique.
- The Firm believes the Credit score Facility represents a big vote of confidence by a number one healthcare investor.
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Properly-Established Payor Contracting and Entry to Strong Doctor Networks
- The Firm believes that Success TMS’ affiliated medical practices profit from robust reimbursement and gives entry to a good doctor community, which removes the necessity to set up new contractual relationships with payors within the areas by which Success TMS at the moment operates, eliminating a course of which is a key barrier to growth.
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Gives Confirmed Regional Administration Group and Potential Synergies
- Success TMS has an skilled administration and operations workforce.
- Success TMS’ Chief Government Officer, Benjamin Klein, has joined the Firm as Chief Working Officer and a member of the Firm’s board of administrators, deepening Greenbrook’s managerial experience, and mixing finest practices of Greenbrook and Success TMS.
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All Fairness Transaction to Construct Worth Collectively
- Buy worth consideration for the Acquisition payable fully in widespread shares of Greenbrook which is meant to align the pursuits of the Success TMS workforce with these of Greenbrook and promote the shared purpose of constructing worth collectively beneath the Greenbrook model.
“We’re very excited to announce the closing of the Acquisition and the Credit score Facility at this time as we consider this to be transformational for the Firm,” stated Invoice Leonard, President and Chief Government Officer of Greenbrook. “We consider these transactions speed up Greenbrook’s potential to develop and provides us the wanted capitalization to additional broaden on our psychological well being platform, by way of our base TMS enterprise, increasing Spravato® program, and different future therapy modalities and indications. We’re excited to start working with Ben Klein as our new COO and our new colleagues at Success TMS who share our ardour for TMS remedy and delivering distinctive affected person care to these affected by psychological well being issues. We consider our enterprise is a wanted one in a time of heightened demand for psychological well being help.”
“We consider Greenbrook’s progressive strategy to treating psychological well being can assist the tens of millions of people that suffer from Main Depressive Dysfunction but battle to learn from conventional therapy modalities,” stated Dr. Avinash Amin, Managing Accomplice of Madryn. “We’re excited to help Greenbrook and look ahead to a collaborative partnership with their administration workforce as they proceed to revolutionize the therapy of psychological well being issues and broaden the TMS footprint.”
Success TMS Acquisition
Pursuant to the acquisition settlement, Greenbrook, by way of its wholly-owned U.S. subsidiary, TMS NeuroHealth Facilities Inc., has acquired the entire issued and excellent fairness pursuits in Success TMS from its father or mother firm, Success Behavioral Holdings, LLC. As consideration for the acquisition of Success TMS, its direct and oblique homeowners (collectively, the “Vendor Events”) have obtained, within the mixture, 8,725,995 widespread shares of Greenbrook (the “Consideration Shares”), and a further 2,908,665 Consideration Shares have been held again and deposited with an escrow agent, to be launched to Benjamin Klein or Greenbrook, as relevant, upon satisfaction of customary working capital and sure different changes, together with to fulfill any indemnity claims towards the Vendor Events.
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The acquisition worth consideration was decided based mostly on the professional forma income contribution of the 2 firms and was fastened at an quantity equal to roughly 40% of the full issued and excellent widespread shares of Greenbrook (the “Widespread Shares”) on a post-Acquisition foundation and topic to changes, as described above.
The Vendor Events are topic to a 12-month lock-up interval in respect of the Widespread Shares issued or issuable to them in reference to the Acquisition. The Vendor Events have additionally obtained sure customary registration rights in reference to the resale of the Widespread Shares acquired by them within the Acquisition, as soon as the lock-up restrictions have expired.
Success TMS is likely one of the largest suppliers of TMS remedy in the US. Since founding its first TMS middle in Florida in 2018, Success TMS has grown to 47 energetic places all through Florida, Pennsylvania, Illinois, New Jersey, Nevada and Wisconsin. The Acquisition has added 47 energetic TMS facilities to Greenbrook’s current service supply platform, bringing its whole to 193 energetic TMS facilities throughout the US. The Acquisition has additionally offered Greenbrook with a brand new presence in further states, together with new administration areas in Illinois, New Jersey, Nevada, Pennsylvania and Wisconsin.
As beforehand disclosed, the acquisition settlement for the Acquisition gives Benjamin Klein with a proper to appoint a single consultant to the board of administrators of Greenbrook for as long as the Vendor Events personal at the very least 5% of the issued and excellent Widespread Shares, topic to sure situations, together with relevant securities legal guidelines and inventory trade necessities. Benjamin Klein has been appointed to the board of administrators because the board nominee, efficient instantly.
Debt Financing
The Credit score Facility gives Greenbrook with a US$55 million time period mortgage, which was funded on closing. As well as, the Credit score Facility permits Greenbrook to incur as much as a further US$20 million in a single draw at any time on or previous to December 31, 2024 for functions of funding future M&A exercise. All quantities borrowed beneath the Credit score Facility will bear curiosity at a fee equal to the three-month LIBOR fee plus 9.0%, topic to a minimal three-month LIBOR ground of 1.5%. The Credit score Facility matures over 63 months and gives for 4 years of interest-only funds.
The Credit score Facility additionally gives Madryn with the choice to transform as much as US$5 million of the excellent principal quantity of the mortgage into Widespread Shares at a worth per share equal to a 15% premium to the 30-day quantity weighted common buying and selling worth of the Widespread Shares as of the deadline of the transaction, topic to customary anti-dilution changes and approval of the Toronto Inventory Change (“TSX”) prior to every such issuance. The Firm has notified The Nasdaq Inventory Market LLC (“Nasdaq”) in accordance with the principles of that trade.
Greenbrook has used roughly US$10.1 million of the proceeds from the Credit score Facility to repay in full the excellent steadiness owing beneath the Firm’s current time period mortgage with Oxford Finance LLC (the “Oxford Facility”) and has terminated the Oxford Facility.
Bloom Burton Securities Inc. acted because the Firm’s sole monetary adviser in reference to the debt financing.
About Greenbrook TMS Inc.
Working by way of 193 Firm-operated therapy facilities (together with these added by way of the Acquisition), Greenbrook is a number one supplier of TMS remedy, an FDA-cleared, non-invasive remedy for the therapy of Main Depressive Dysfunction and different psychological well being issues, in the US. TMS remedy gives native electromagnetic stimulation to particular mind areas recognized to be immediately related to temper regulation. Greenbrook has offered greater than 840,000 TMS remedies to over 24,000 sufferers battling despair.
About Madryn Asset Administration, LP.
Madryn Asset Administration is a number one different asset administration agency that invests in progressive healthcare firms specializing in distinctive and transformative merchandise, applied sciences, and companies. The agency attracts on its in depth and various expertise spanning the funding administration and healthcare industries, and employs an impartial analysis course of based mostly on authentic insights to focus on engaging financial alternatives that ship robust risk-adjusted and absolute returns for its restricted companions whereas creating long-term worth in help of its portfolio firms.
Cautionary Word Concerning Ahead-Trying Data
Sure info on this press launch, together with statements relating to the debt financing and the Acquisition, the potential advantages and synergies to be derived therefrom, expectations relating to future profitability, and the variety of Widespread Shares issuable in connection therewith, represent forward-looking info throughout the that means of relevant securities legal guidelines in Canada and the US, together with the US Personal Securities Litigation Reform Act of 1995. In some instances, however not essentially in all instances, forward-looking info could be recognized by way of forward-looking terminology equivalent to “plans”, “targets”, “expects” or “doesn’t count on”, “is predicted”, “a chance exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “doesn’t anticipate” or “believes”, or variations of such phrases and phrases or state that sure actions, occasions or outcomes “could”, “may”, “would”, “may”, “will” or “will probably be taken”, “happen” or “be achieved”. As well as, any statements that discuss with expectations, projections or different characterizations of future occasions or circumstances include forward-looking info. Statements containing forward-looking info usually are not historic info however as an alternative symbolize administration’s expectations, estimates and projections relating to future occasions.
Ahead-looking info is essentially based mostly on various opinions, assumptions and estimates that, whereas thought-about cheap by the Firm as of the date of this press launch, are topic to recognized and unknown dangers, uncertainties, assumptions and different components which will trigger the precise outcomes, degree of exercise, efficiency or achievements to be materially completely different from these expressed or implied by such forward-looking info, together with, however not restricted to, the components described in better element within the “Danger Elements” part of the Firm’s annual report on Type 20-F for the fiscal yr ended December 31, 2021 and within the Firm’s different supplies filed with the Canadian securities regulatory authorities and the US Securities and Change Fee once in a while, obtainable at www.sedar.com and www.sec.gov, respectively. These components usually are not supposed to symbolize an entire checklist of the components that might have an effect on the Firm or its potential to attain the potential advantages and synergies from the Acquisition and its expectations relating to future profitability; nonetheless, these components ought to be thought-about rigorously. There could be no assurance that such estimates and assumptions will show to be appropriate. The forward-looking statements contained on this press launch are made as of the date of this press launch, and the Firm expressly disclaims any obligation to replace or alter statements containing any forward-looking info, or the components or assumptions underlying them, whether or not because of new info, future occasions or in any other case, besides as required by regulation.
Contacts
Glen Akselrod
Investor Relations
Greenbrook TMS Inc.
Contact Data:
[email protected]
1-855-797-4867