Akumin Inc. (TSX: AKU) announced this morning that it has entered into an agreement to acquire radiology firm Alliance HealthCare Services for aggregate proceeds of US$820.0 million. The company, through its subsidiary Akumin Corp., is acquiring all issued and outstanding shares of Thaihot Investment Company, the sole parent company of Alliance.
The acquisition will be partially financed with the issuance of 14,223,570 Akumin shares, representing 19.99% equity, at US$2.98 per share.
In connection with financing the transaction, Akumin enlisted investment firm Stonepeak to provide a debt and equity financing commitment. Stonepeak committed to subscribe to Akumin unsecured notes at 11% annual interest for a principal amount between US$200.0 and US$689.6 million. The interest will be payable quarterly in cash and the notes will mature 50% in 2032 and the remaining 50% in 2033.
Furthermore, Akumin will also issue 3.5 million shares to Stonepeak at US$2.98 per share for aggregate proceeds of approximately US$10.4 million.
Akumin will also issue common share purchase warrants to Stonepeak equal to 15% of the principal amount of unsecured notes that the latter will commit. The warrants are exercisable at the same share price within 10 years from the issuance date.
Following the financing commitment, Stonepeak will be granted investor rights including a seat on the Akumin board of directors should the principal amount of the unsecured notes committed be at least US$100.0 million.
Currently, Akumin has a total of 71,153,427 issued and outstanding common shares. When the transaction closes, a combined total of 17,723,570 shares will be issued to Alliance and Stonepeak, representing 24.91% equity. Should Stonepeak commit the maximum principal amount of unsecured notes and exercise the purchase warrants attached in full, the transactions would amount to the issuance of a total 52,433,469 shares or 73.69% equity.
The acquisition is expected to close in the third quarter of 2021, with an outside date of October 23, 2021, but is extendable for 90 days upon agreement of both parties. The transaction is still subject to customary regulatory approvals and closing conditions.
Akumin Inc. last traded at $3.81 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.