Neighbourly Pharmacy Receives Go-Private Offer At $20.50 Per Share

Two and a half years after going public following a $175 million financing, Neighbourly Pharmacy (TSX: NBLY) is looking to return to the private markets. The company this morning disclosed that its largest shareholder, Persistence Capital Partners, has made an offer to take the entity private.

The transaction has seen Persistence propose to take the company private at a figure of $20.50 per share, with the figure representing a 20% gain to those who invested in the firms IPO at $17.00 in 2021. Furthermore, it represents a premium of 69% to yesterday’s closing price of $12.12 on the TSX.

The firms board, excluding its chair Stuart Elman who recused himself, has determined that the offer is in the best interest of the company and its shareholders and intends to recommend proceeding with the transaction.

“As a private company, Neighbourly will have more flexibility and resources to pursue its strategic vision to advance the role that independent pharmacies can play in Canada. We are confident that this proposed transaction will benefit Neighbourly’s customers, patients, employees, and partners, as well as provide a fair and attractive return to its public shareholders,” commented Elman, whom is also a managing partner of Persistence Capital.

TD Bank in a fairness opinion meanwhile suggested that the fair market value is between $20.50 and $25.50 a share.

Persistence currently owns 22.4 million shares of Neighbourly, or roughly 50.2% of the company.

The proposed go-private transaction would be payable in cash, funded via equity and debt financing conducted by Persistence. The deal is subject to shareholder approval, and currently expected to close late in Q4 or early in Q1 2024.

Neighbourly Pharmacy last traded at $12.12 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.

Leave a Reply