Mainstreet Health Investments Inc. Announces Successful Closing of Subscription Receipt Offering and Exercise in Full of Over-Allotment Option for Gross Proceeds of Approximately US$74.8 Million
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TORONTO, Oct. 6, 2016 /CNW/ - Mainstreet Health Investments Inc. (TSX:HLP.U) (the "Company") is pleased to announce that it has completed its previously announced offering of subscription receipts (the "Subscription Receipts") with a syndicate of underwriters (collectively, the "Underwriters") led by BMO Capital Markets, CIBC Capital Markets and National Bank Financial, on a bought deal basis. A total of 7,406,000 Subscription Receipts (including Subscription Receipts issued pursuant to the exercise in full of the over-allotment option) were issued at a price of US$10.10 per Subscription Receipt for total gross proceeds of US$74,800,600 (the "Offering").
The Company intends to use the proceeds from the Offering to finance a portion of the previously announced acquisitions of interests in seven seniors housing and care properties and investments in five mezzanine loans (collectively, the "Acquisitions").
Upon the satisfaction or waiver of conditions to the closing of those Acquisitions (other than the payment of the applicable purchase price and such conditions precedent that by their nature are to be satisfied at the closing of the applicable Acquisition), the value of which represent in the aggregate not less than 80% of the aggregate value of all of the Acquisitions (the "Escrow Release Condition"), (a) one common share of the Company (a "Common Share") will be automatically issued in exchange for each Subscription Receipt (subject to customary anti-dilution protection), without payment of additional consideration or further action by the holder thereof; (b) an amount per Subscription Receipt equal to the per-share cash dividends declared by the Company on the Common Shares to holders of record on a date during the period that the Subscription Receipts are outstanding, if any, net of any applicable withholding taxes, if any, will become payable in respect of each Subscription Receipt; and (c) the net proceeds from the sale of the Subscription Receipts will be released from escrow to the Company for the purposes of completing the Acquisitions and working capital purposes.
The gross proceeds from the sale of the Subscription Receipts less 50% of the Underwriters' fee will be held by an escrow agent pending the satisfaction of the Escrow Release Condition. There can be no assurance that the applicable consents and regulatory approvals will be obtained, that the other conditions to the closing of the Acquisitions will be met or that the Acquisitions will be consummated.
If (a) the Escrow Release Condition is not satisfied, or deemed to be satisfied, on or before 5:00 p.m. (Toronto time) on January 31, 2017; (b) such number of Acquisitions are terminated at an earlier time so that the Escrow Release Condition cannot be satisfied; or (c) the Company has advised the Underwriters or announced to the public that the Escrow Release Condition cannot be satisfied; the gross proceeds of the Offering and pro rata entitlement to interest earned or deemed to be earned on the gross proceeds of the Offering, net of any applicable withholding taxes, if any, will be paid to holders of the Subscription Receipts and the Subscription Receipts will be cancelled.
The Subscription Receipts were offered pursuant to a short-form prospectus dated September 29, 2016 filed in each of the provinces and territories of Canada, which describes the terms of the Offering. A copy of the short-form prospectus is available under the Company's profile on the SEDAR website at www.sedar.com.
The securities offered pursuant to the Offering have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the "1933 Act") and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States or to, or for the account or benefit of, U.S. persons.
About Mainstreet Health Investments Inc.
Mainstreet Health Investments Inc. is a North American health care real estate company with a growing portfolio of high quality properties located in the United States. Our properties are operated by best-in-class health care providers under long-term, triple net leases. Our mission is to create long-term shareholder value while providing an investment opportunity that matters. For more information, visit www.mainstreethealthinvestments.com.
Cautionary Statement Regarding Forward-Looking Information
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of the Company and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate", "pro-forma" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts and projections and include, without limitation, statements regarding the completion of the Acquisitions and the proposed use of proceeds of the Offering. The forward-looking statements in this news release are based on certain assumptions, including, without limitation, that all conditions to completion of the Acquisitions will be satisfied or waived. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the heading "Risk Factors" in the Company's most recent annual information form and final short-form prospectus dated September 29, 2016, each of which is available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE Mainstreet Health Investments Inc.
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