Provides additional capital to fund
biopharmaceutical research, driving value for DRI's unitholders and
partners
TORONTO, Feb. 8, 2023
/CNW/ - DRI Healthcare Trust (TSX: DHT.UN) (TSX: DHT.U) ("DRI"
or "the Trust") announced today that it has completed a private
placement of US$95 million of
preferred securities (the "Private Placement") to an investor group
that includes funds managed by EdgePoint Wealth Management Inc.
("EdgePoint"), Alberta Investment Management Corporation and FAX
Capital Corp.
"We have an exciting opportunity to execute royalty transactions
on high quality therapeutics. This is driven by the dislocation in
biotech capital markets and the capital needed to fund
ground-breaking research in the life sciences," said Behzad Khosrowshahi, Chief Executive Officer of
DRI. "This financing will give us the ability to execute on a
larger portion of our pipeline and to drive value for our partners
and our unitholders."
DRI also announced that the Trust has increased its deployment
target for the five years ending 2025 to between US$850 million and US$900
million, up from US$650
million to US$750 million, for
the five years ending 2025. Since its initial public offering, the
Trust has deployed US$381.5 million
with potential future performance-based milestones and options to
deploy up to US$76.0 million, for
total potential deployment in our transactions of up to
US$457.5 million.
"Given our strong pace of deployment to date, and the quality of
our near-term pipeline, we are pleased to make this revision to our
five-year deployment target," continued Mr. Khosrowshahi.
"We are very excited to have this opportunity to partner with
DRI to help capitalize on the generational opportunity to invest in
high quality pharmaceutical royalty streams," said Frank Mullen, Partner at EdgePoint. "We look
forward to working with the team at DRI as they continue to execute
on their growth plans."
Private Placement
Summary
The Private Placement provides gross proceeds to DRI of
US$95 million through the sale of
US$95 million principal amount of
Series A Preferred Securities and US$19.76
million principal amount of Series B Preferred Securities
(the "Preferred Securities"), which are unsecured, subordinated
debt securities of the Trust. The Preferred Securities will
initially pay cash interest at a rate of 7.04% per annum on the
principal amount of the Preferred Securities, payable semi-annually
on June 30 and December 31 of each year.
The Series A Preferred Securities will mature on February 8, 2073, and the Series B Preferred
Securities will mature on December 27,
2027. The Series A Preferred Securities can be redeemed at
par, at the option of DRI, at any time from and after December 27, 2027. The Preferred Securities will
not be redeemable by the Trust prior to December 27, 2027, except in the event of a
change of control of the Trust, in which case the Preferred
Securities will be subject to a mandatory redemption.
The interest rate on the Series A Preferred Securities will
increase to 10% per annum if any of the Series A Preferred
Securities are outstanding on January 1,
2028, and will be subject to an annual increase of 1.5% per
annum if any of the Preferred Securities remain outstanding on each
one year anniversary of such date, up to a specified cap.
In connection with the Private Placement, DRI also issued
6,369,180 warrants (the "Warrants") to the Private Placement
investors. Each Warrant entitles the holder thereof to
acquire one unit of the Trust for an exercise price of US$11.62 at any time until the expiry of the
Warrant on February 8, 2028. The
warrant exercise price represents a 106% premium to the
volume-weighted average price of the Trust's units for the 20
trading days ending February 7,
2023.
Additional information regarding the Private Placement and the
terms of the Preferred Securities and the Warrants will be included
in a material change report to be filed by the Trust on
www.sedar.com. Copies of the indentures for the Preferred
Securities and the Warrants will be filed on www.sedar.com. This
press release is only a summary of certain principal terms of the
Private Placement, and the summary is qualified in its entirety by
reference to the more detailed information contained in indentures.
Scotia Capital Inc. acted as exclusive financial advisor and
private placement agent, and Osler, Hoskin & Harcourt LLP acted as
legal advisor to DRI.
About DRI Healthcare
Trust
DRI Healthcare Trust is managed by DRI Capital Inc. ("DRI
Capital"), a pioneer in global pharmaceutical royalty monetization
with a more than 30-year history of accelerating innovation by
providing capital to inventors, academic institutions and biopharma
companies. Since its founding in 1989, DRI Capital has deployed
more than US$2.5 billion, acquiring
more than 60 royalties on 40-plus drugs, including Eylea, Spinraza,
Zytiga, Remicade, Keytruda and Stelara. DRI Healthcare Trust's
units are listed and trade on the Toronto Stock Exchange in
Canadian dollars under the symbol "DHT.UN" and in U.S. dollars
under the symbol "DHT.U". To learn more, visit
drihealthcare.com or follow us on LinkedIn.
Forward Looking
Information
This news release may contain forward-looking information within
the meaning of applicable securities legislation. Forward-looking
information generally can be identified by the use of
forward-looking words such as "expect", "continue", "anticipate",
"intend", "aim", "plan", "believe", "budget", "deploy", "estimate",
"forecast", "foresee", "close to", "target" or negative versions
thereof and similar expressions. Some of the specific
forward-looking information in this news release may include, among
other things, statements regarding the Trust's deployment target.
Forward-looking information is based on a number of assumptions and
is subject to a number of risks and uncertainties, many of which
are beyond the Trust's control that could cause actual results to
differ materially from those that are disclosed in or implied by
such forward-looking information. These assumptions include: our
assumptions regarding demand and growth in opportunities for
royalty investing; our ability to obtain financing and maintain our
existing financing on acceptable terms; our ability to maintain
business relationships with potential royalty counterparties and
other industry partners; and the absence of material adverse
changes in our industry or the global economy. These risks and
uncertainties include, but are not limited to, those that are
disclosed in the Trust's most recent annual information form and in
the Trust's management's discussion and analysis. All
forward-looking information in this news release speaks as of the
date of this news release. The Trust does not undertake to update
any such forward-looking information whether as a result of new
information, future events or otherwise except as required by law.
Additional information about these assumptions and risks and
uncertainties is contained in the Trust's filings with securities
regulators, including its latest annual information form and
Management's Discussion and Analysis. These filings are also
available at the Trust's website at drihealthcare.com.
SOURCE DRI Healthcare Trust