/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
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HALIFAX, Feb. 19, 2019 /CNW/ - ViveRE Communities
Inc. (TSXV: VCOM) ("ViveRE" or the "Company")
announced today that it has entered into an agreement (the
"Acquisition Agreement") to acquire Village View No. 2
Limited Partnership, a limited partnership formed under the laws of
the Province of New Brunswick
("Village View LP"), whose sole asset is a multi-family
rental property located at 50 Noel Avenue, Saint John, New Brunswick (the "Noel
Property"). The purchase price for the Noel Property is
$7,900,000, subject to customary
adjustments, which will be paid by the assumption of the
approximately $5.4 million existing
2.55% APR (annual percentage rate) mortgage, maturing September 2026 with respect to the Noel Property
(the "Assumed Debt"), the issuance of 1,000,000 common
shares to the vendors at a price of $0.20 per common share (the "Acquisition
Shares"), and the balance in cash. The acquisition of the Noel
Property in accordance with the Acquisition Agreement is referred
to herein as the "Acquisition".
The Acquisition has been structured as a purchase of all the
general partner interests of Village View LP held by SBLS Holdings
Inc., a corporation incorporated under the law of the Province of
New Brunswick, and all of the
limited partnership interests of Village View LP held by 621946
N.B. Inc., a corporation incorporated under the law of the Province
of New Brunswick, Anron Inc., a
corporation incorporated under the law of the Province of
New Brunswick, and Residential
Investors and Developers Ltd., a corporation incorporated under the
law of the Province of New
Brunswick. The Acquisition is an arm's length
transaction.
Completion of the Acquisition is subject to customary closing
conditions for transactions of this nature, including the receipt
of required financing and all necessary third party (including
lenders) consents and approvals. ViveRE expects the completion of
the Acquisition to occur during the first quarter of 2019.
The Acquisition is a "Fundamental Acquisition", as such term is
defined in the policies of the TSXV, and is therefore subject to
the approval of the TSXV.
Description of the Noel Property
The Noel Property, which is 100% occupied as of February 1st, 2019, is a high quality, 2016
built, 42 unit, multi-family rental property residence geared
towards the over 55 year old demographic. It is located in the
growing St. John, NB sub-market of
Millidgeville, situated on the northern edge of the Saint John
River, and adjacent to the Company's existing property located at
41 Noel Avenue. The Noel Property offers high-end living spaces
with granite countertops, stainless appliances, dishwasher,
microwave range hood, washer and dryer, walk-in closet, ensuite
bathrooms and private balconies. Common areas include gym
facilities, media and community room, storage lockers as well as 60
parking spaces. The property has close proximity to a prominent
transit route, Horizon's Saint John Regional Hospital, the
University of New Brunswick and an
abundance of nearby shopping, and dining, and community
centres.
Audited financial results for Village View LP for the year ended
September 30, 2018, copies of which
are available on SEDAR in the Company's preliminary prospectus
filed today, include total assets of $5,876,726 (2017: $6,108,268), revenue of $632,071 (2017: $644,975) and net loss of $56,585 (2017: ($138,030)).
The Acquisition and related transaction costs are being financed
through a combination of: (i) the assumption of the Assumed Debt;
(ii) the issuance of the Acquisition Shares; and (iii) a portion of
the net proceeds of the Offering (as defined below).
Description of the Public Offering
The Company also announced today that it has entered into an
agreement (the "Agreement") with Echelon Wealth
Partners Inc. and Industrial Alliance Securities Inc.
(collectively, the "Agents" and each individually, an
"Agent"), and has filed a preliminary short form prospectus
with the securities regulatory authorities in the provinces of
Nova Scotia, British Columbia, New Brunswick, Newfoundland and Labrador, Ontario and Saskatchewan, pursuant to which the Company
has agreed to issue, and the Agents have agreed sell, on a
"commercially reasonable efforts" basis, a minimum of 12,500,000
common shares and a maximum of 40,000,000 common shares of the
Company (the "Shares") at a purchase price of $0.20 per Share (the "Offering Price"),
for aggregate gross proceeds of up to $8,000,0000.
The Company has agreed to grant to the Agents an
option (the "Over-Allotment Option"), exercisable
in whole or in part at the sole discretion of the Agents, any time
not later than the 30th day following the Closing Date (as defined
below), to offer up to an additional 6,000,000 common shares
(the "Over-Allotment Shares") at the Offering Price for
additional gross proceeds of up to $1,200,000, for the purpose of covering
over-allotments made in connection with the Offering and for market
stabilization purposes.
The Shares and the Over-Allotment Shares are collectively
referred to herein as the "Offered Shares" and the offering
of the Offered Shares by Company is hereinafter referred to as the
"Offering".
The Company has agreed to: (i) pay the Agents an advisory fee of
$30,000 (plus HST) (the "Advisory
Fee") upon the execution of the Agency Agreement; (ii) pay the
Agents a cash commission (the "Agents' Fee") equal to (A)
6.0% of the gross proceeds of the Offering, other than purchasers
on the President's List (as defined in the Agency Agreement),
including the proceeds realized from the sale of any Offered Shares
sold pursuant to the exercise of the Over-Allotment Option, and (B)
3.0% (plus applicable taxes) of gross proceeds of the Offering in
respect of subscribers on the President's List up to a maximum of
$2,500,000, including the proceeds
realized from the sale of any Offered Shares sold pursuant to the
exercise of the Over-Allotment Option, less the Advisory Fee paid
upon the execution of the Agency Agreement; and (iii) issue to the
Agents non-transferable share purchase warrants (each, an "Agent
Warrant") equal to 6.0% of the number of the Offered Shares
sold under the Offering (3.0% in respect of the President's List),
with each Agent Warrant exercisable into one common share of the
Company at an exercise price equal to the Offering Price for a
period of 24 months from the Closing Date.
The closing of the Offering is anticipated to occur on
March 15, 2019 or such other date as the Company and the
Agents may agree (the "Closing Date").
A portion of the gross proceeds of the Offering will be used to
finance the Acquisition and the Company's expenses of the
Acquisition. The Company also has a potential pipeline of qualified
properties comprising approximately 500 units and $100,000,000 in estimated value. These
opportunities are all in secondary markets in New Brunswick and Nova Scotia. Included in this pipeline are
properties of similar size and financial metrics as the Noel
Property. It is possible that the proceeds of the Offering will be
utilized to acquire one of these properties in the second quarter
of 2019. Included in such opportunities are the Company's options
to acquire two multi-unit residential properties adjacent to the
Company's already owned 41 Noel Avenue property, and the Noel
Property which is the target of the Acquisition. Those purchase
options consist of the building located at 51 Noel Avenue, pursuant
to an option agreement entered into on February 15, 2019 (the "51 Noel Option"),
and the building under construction at 60 Noel Avenue, pursuant to
an amended and restated option agreement dated June 26, 2018 (the "60 Noel Option"). The
51 Noel Option is exercisable by the Company until January 31, 2020, unless extended for an
additional 120 days at the Company's option and upon payment of a
non-refundable fee of $25,000. 51
Noel Avenue is a 47 unit building whose construction was completed
in 2018. The 60 Noel Option is exercisable by the Company within
120 days of the vendor providing notice that it has leased a
minimum of 95% of the apartments in the building and is extendable
for an additional 120 days at the Company's option and upon payment
of a non-refundable fee of $25,000.
Copies of the option agreements for the 51 Noel Option and 60 Noel
Option are available on the Company's SEDAR profile.
While the Company intends to use the proceeds of the Offering as
described above, there may be circumstances where, for sound
business reasons, a reallocation of funds may be necessary. In the
event the Company is not able to complete the Acquisition, the
Company will reallocate the proceeds of the Offering to fund other
potential acquisitions, for capital expenditures and for other
general purposes, which may include the repayment of existing debt
of the Company.
The Acquisition, issuance of Acquisition Shares and the Offering
will be subject to certain customary conditions including, but not
limited to, the receipt of all necessary approvals, including the
approval of the TSXV, and the applicable securities regulatory
authorities. A copy of the preliminary short form prospectus is
available on SEDAR under the Company's profile at
www.sedar.com.
The common shares subject to the Offering have not been and
will not be registered under the U.S. Securities Act and may not be
offered or sold in the United
States absent registration under or an applicable exemption
from the registration requirements of the U.S. Securities Act. This
press release does not constitute an offer to sell or the
solicitation of an offer to buy the shares herein described, and
shall not constitute an offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of that jurisdiction.
About ViveRE Communities Inc.
ViveRE is a real estate acquisition and ownership company,
focused on recently built or recently refurbished, highly leased
multi-residential properties in secondary markets across
Canada. The Company aims to
satisfy the needs of the newly emerging 55+ resident. This
demographic is changing the way residential rental apartments cater
to their requirements. Their desire for community, along with
services and convenience amenities, has led to the emergence of the
Naturally Occurring Retirement Community or "NORC". Apartments are
the next "home", after years of owning they look to the carefree
lifestyle provided through renting in a community of their peers.
ViveRE intends to consolidate this emerging market niche across the
country.
Forward-looking statements
This news release contains forward-looking statements
relating to the future operations of ViveRE and other statements
that are not historical facts. Forward-looking statements are often
identified by terms such as "aims", "intends", "will", "may",
"should", "anticipate", "expects" and similar expressions. All
statements other than statements of historical fact, included in
this release, including, without limitation, statements regarding
the Acquisition, Acquisition Shares, the Offering, the size and
pricing of the Offering, receipt of requested TSXV and securities
regulatory approvals, and the future plans and objectives of ViveRE
Communities Inc, are forward-looking statements that involve risks
and uncertainties, and are necessarily based on a number of
assumptions that, while considered reasonable by
management, are inherently subject to business, market and economic
risks, uncertainties and contingencies that may cause actual
results, performance or achievements to be materially different
from those expressed or implied by forward-looking statements.
There can be no assurance that such statements will prove to be
accurate and actual results and future events could differ
materially from those anticipated in such statements. Important
factors that could cause actual results to differ materially from
ViveRE Communities Inc.'s expectations include other risks detailed
from time to time in the filings made by ViveRE Communities Inc.
with securities regulators.
Forward-looking information in this news release includes
expectations relating to: the pipeline for future acquisitions
which may be impacted by ViveRE's ability to negotiate suitable
terms, due diligence, access to capital and market conditions;
operating results which may be impacted by unexpected vacancies and
maintenance expenses; and availability of capital which may be
impacted by the results of the offering, capital market and
borrowing conditions.
The reader is cautioned that assumptions used in the
preparation of any forward-looking information may prove to be
incorrect. Events or circumstances may cause actual results to
differ materially from those predicted, as a result of numerous
known and unknown risks, uncertainties, and other factors, many of
which are beyond the control of ViveRE Communities Inc. The reader
is cautioned not to place undue reliance on any forward-looking
information. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement. The
forward-looking statements contained in this news release are made
as of the date of this news release and ViveRE Communities Inc.
will only update or revise publicly the included forward-looking
statements as expressly required by Canadian securities
law.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this press
release.
SOURCE ViveRE Communities Inc.