NBLY Neighbourly Pharmacy Inc

TORONTO, March 8, 2024 /CNW/ - Neighbourly Pharmacy Inc. ("Neighbourly" or the "Company") (TSX: NBLY), Canada's largest and fastest growing network of independent pharmacies, announced today that at the Company's special meeting (the "Meeting") of its shareholders (the "Shareholders") held earlier today, an overwhelming majority of Shareholders voted in favour of the special resolution (the "Arrangement Resolution") approving the previously announced statutory plan of arrangement involving the Company and T.I.D. Acquisition Corp. (the "Purchaser"), a newly-formed entity controlled by Persistence Capital Partners ("PCP"), pursuant to which the Purchaser will acquire all of the issued and outstanding common shares (the "Common Shares") in the capital of the Company, other than those Common Shares already owned by PCP or its affiliates, for $18.50 per Common Share in cash (the "Cash Consideration") plus one contingent value right ("CVR") per Common Share, which will entitle the holder thereof to an additional cash payment of $0.61 per CVR if the Company's Pro-Forma Adjusted EBITDA for the 2026 fiscal year is at or above $128.0 million (the "CVR EBITDA Target"), the whole subject to the terms and conditions of the arrangement agreement dated January 15, 2024 (the "Arrangement Agreement") between the Company and the Purchaser (the "Arrangement").

Approval of the Arrangement Resolution required the affirmative vote of at least (i) two-thirds (66 ^2/3%) of the votes cast by Shareholders virtually present or represented by proxy at the Meeting, voting as a single class (each holder of Common Shares being entitled to one vote per Common Share) and (ii) the approval of the majority of the Shareholders virtually present or represented by proxy at the Meeting, excluding the votes of PCP and its affiliates, and any other Shareholders whose votes were required to be excluded for the purposes of "minority approval" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions in the context of a "business combination".

Details on the voting results at the Meeting are below:

A report on voting results for the Meeting will be filed under the Company's profile on SEDAR+ at sedarplus.com.

Neighbourly anticipates returning to the Ontario Superior Court of Justice (Commercial List) (the "Court") on March 13, 2024 to seek a final order of the Court approving the Arrangement. Completion of the Arrangement remains subject to closing conditions as set forth in the Arrangement Agreement, including approval of the Court. Assuming that the conditions to closing are satisfied or waived (if permitted), it is expected that the Arrangement will be completed on or about March 15, 2024. Following completion of the Arrangement, the Common Shares will be delisted from the Toronto Stock Exchange and applications will be made for Neighbourly to cease to be a reporting issuer under applicable securities laws.

Pro-Forma Adjusted EBITDA

This news release makes reference to "Pro-Forma Adjusted EBITDA", which means the Company's consolidated net income (determined in accordance with the International Financial Reporting Standards) as adjusted in accordance with the adjustments provided in Schedule F of the Arrangement Agreement. In order to determine "Pro-Forma Adjusted EBITDA", the EBITDA of any business that has been subject of an acquisition during a fiscal year shall be included in the EBITDA of the Company for such fiscal year on a pro forma normalized basis for the previous thirteen (13) fiscal periods ended on the last day of such fiscal year, as if such acquisition occurred on the first day of the fiscal year for which the EBITDA of the Company is calculated. Refer to the definition of "EBITDA" provided in the definitive Arrangement Agreement which will is available on the SEDAR+ profile of Neighbourly at www.sedarplus.com.

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 include, among other things, statements relating to the anticipated timing for completion of the Arrangement, including the parties' ability to satisfy the conditions to the consummation of the transaction; the delisting of the Common Shares from the TSX and the Company ceasing to be a reporting issuer under applicable securities laws; the timing of the hearing for the final order; the receipt of the required Court approval and other customary closing conditions; and the achievement of the CVR EBITDA Target and the payout of additional amounts to holders of CVRs under the Arrangement Agreement.

Risks and uncertainties related to the transactions contemplated by the Arrangement Agreement include, but are not limited to: the failure to obtain the required Court approval for, or satisfy other closing conditions to effect, the Arrangement; the risk that the Arrangement may involve unexpected costs, liabilities or delays; the failure of PCP to enter into definitive agreements with respect to the debt commitment or the equity commitment, or PCP's failure to satisfy the closing conditions thereunder in a timely manner or at all; the Purchaser's failure to pay the Cash Consideration at closing of the transaction; the ability of the Purchaser to pay any expense fee under the Arrangement Agreement, should such fee become payable, as its obligations are not guaranteed; the absence of a reverse break fee in favour of the Company; 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; risks related to the diversion of management's attention from Neighbourly's ongoing business operations while the transaction is pending; and other risks and uncertainties affecting Neighbourly, including those described in in the Company's annual information form for the 52-week period ended March 25, 2023, as well as other filings and reports Neighbourly may make from time to time with the Canadian securities authorities.

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.

This announcement is for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell, or an offer to sell or a solicitation of an offer to buy, Neighbourly Common Shares.

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 293 locations, reinforcing the Company's reputation as the industry's acquirer of choice.

SOURCE Neighbourly Pharmacy Inc.