MONTREAL, April 6, 2021 /CNW/ - Carebook Technologies Inc. ("Carebook" or the "Company") (TSXV: CRBK) (OTCPK: CRBKF) (XETR: PMM1), a leading Canadian digital health company offering innovative digital health and virtual care solutions for pharmacies, employers and insurers, is pleased to announce the closing of its previously announced acquisition of InfoTech Inc., doing business as Wellness Checkpoint® ("InfoTech"). InfoTech (previously referred to as TargetCo in news releases issued by Carebook), founded by Zorianna Hyworon and based in Winnipeg, Manitoba, is a recognized global leader in health and productivity risk management. InfoTech's proprietary software platform Wellness Checkpoint, IP and metrics are supported by advanced analytics and focus on employees' physical health, mental health and well-being, and their impact on work and business effectiveness.
A Canadian company with a global reach, InfoTech developed the first online, interactive health risk assessment, Wellness Checkpoint®. Wellness Checkpoint has grown to serve close to one million employees and has evolved into a multilingual, web-based service used by many Fortune 500 companies in over 100 countries. Delivered as an online, multilingual (26 languages and counting), global hosted Software as a Service, Wellness Checkpoint seamlessly integrates into the business fabric of health, benefits, HR and risk management. Representative clients include multinational companies in the financial, technology, pharmaceutical, manufacturing and resources sectors, many of whom are long-term clients.
InfoTech is profitable and will be immediately accretive to Carebook. The combined unaudited trailing twelve-month revenue of Carebook's and InfoTech's operations would have been $7.7 million as of September 30, 2020.
The total purchase price for the acquisition is C$14 million on a cash free and debt free basis, consisting of a combination of C$9 million in cash and C$5 million in common shares of Carebook ("Carebook Shares") at a price of C$1.21 per Carebook Share. The purchase price is subject to customary post-closing adjustments for working capital, transaction expenses and net debt. The cash portion of the purchase price for the acquisition of InfoTech is being financed by the recently disclosed C$11 million debt financing (the "Financing") with a leading Canadian Schedule 1 bank and one of its affiliates (together, the "Lenders"), consisting of a C$7 million revolving term facility and a C$4 million non-revolving term loan facility, as more fully described below.
"We are thrilled to welcome InfoTech into the Carebook family," commented Pascale Audette, CEO of Carebook. "I am particularly looking forward to working with the Company's highly regarded team. Combining InfoTech's global and dynamic operations with those of Carebook will allow us to leverage the Wellness Checkpoint platform and blue-chip customer base with Carebook's core engagement platform. The combination of Carebook's wellness and virtual care platform with InfoTech's corporate health and well-being expertise will drive significant revenue growth. We have identified multiple opportunities that can accelerate the combined entity's growth over the next twelve months. This acquisition positions Carebook for overall growth on a global basis in the employer vertical."
"We look forward to joining the Carebook team so that we may accomplish great things together." commented Zorianna Hyworon, Founder, President & CEO of InfoTech. "My personal and business mission has always been to support employers globally in making informed risk management decisions with a broader view of risk that encompasses physical, psychological and organizational factors that impact health, well-being, productivity and effectiveness. Working with Carebook, a company also rooted in science and with a like-minded, people-centric vision, presents an opportunity for more innovation, more engagement, and more growth globally."
Carebook is pleased to announce that it has secured the following credit facilities from the Lenders, which have enabled it to complete the acquisition:
C$7 million revolving term facility (the "Revolving Facility"); and
C$4 million non-revolving term loan facility (the "Term Loan Facility", and together, the "Credit Facilities").
Under the conditions of the agreement governing the Credit Facilities (the "Credit Agreement"), the Revolving Facility will be available for a one year committed term, renewable annually, and bears interest at CDOR plus a variable margin for Canadian variable rate loans. The initial margin will be 8.0% and will be reduced to 4.50% after completion of certain milestones, and further reduced to 3.25% from completion of the Offering (as defined below). The Revolving Facility is subject to a borrowing base equal to six times the monthly recurring revenues of Carebook and its subsidiaries, minus all amounts which could give rise to a claim which ranks or is capable of ranking in priority to the Lenders' security or otherwise in priority to any claim by the Lenders for repayment of any amounts owing under the Credit Agreement. The amount available under the Revolving Facility will be decreased to C$4 million upon the earlier of: (i) August 6, 2021 and (ii) completion of the Offering.
The Term Loan Facility will mature on April 6, 2022 and bears interest at CDOR plus a margin of 4.50% for Canadian variable rate loans and will be fully drawn to complete the acquisition of InfoTech.
Borrowings under the Credit Facilities may be in either Canadian dollars or U.S. dollars at Carebook's election. Interest on the Credit Facilities is payable monthly in arrears.
The Financing is to be secured by a first-ranking security interest in all of the present and future property and assets of the Company and certain of its subsidiaries. In connection with the Financing, Carebook has agreed, subject to acceptance by the Exchange, to issue to the Lenders 417,646 warrants to purchase Carebook Shares. Each such warrant will entitle the Lenders to purchase, on or before April 6, 2022, one Carebook Share at an exercise price of C$1.22, or as otherwise determined and permitted in accordance with the policies of the TSXV rules. The warrants, and the Carebook Shares issuable upon exercise of the warrants, will be subject to a restriction on resale for a period of 4 months and 1 day following the issuance of the warrants. The issuance of the warrants to the Lenders is subject to prior approval of the TSXV.
In addition to financing the acquisition, Carebook plans to use the proceeds of the Financing to finance the working capital needs and for general corporate purposes of the Company. Pursuant to the terms of the Credit Agreement, Carebook has undertaken to complete, within 120 days following the Closing Date, an offering of Carebook Shares (the "Offering") up to $11M in equity, or a lesser amount dependent on certain events.