Benzinga | Sep 21, 2021 04:57PM EDT

Greenbrook TMS To Acquire Achieve TMS East And Central, Announces $10M Bought Deal Public Offering

Greenbrook TMS Inc. (TSX:GTMS) (NASDAQ:GBNH) ("Greenbrook" or the "Company"), a leading provider of Transcranial Magnetic Stimulation ("TMS") therapy in the United States, announced today that it has entered into a purchase agreement pursuant to which Greenbrook will acquire Achieve TMS East, LLC ("Achieve TMS East") and Achieve TMS Central, LLC ("Achieve TMS Central", and together with Achieve TMS East, "Achieve TMS East/Central").

The Company also announced today that it has entered into an agreement to sell 1,300,000 common shares of the Company (the "Common Shares") on a bought deal basis at a price of US$7.75 (or C$9.93)per Common Share (the "Offering Price") to a syndicate of underwriters co-led by Stifel Nicolaus Canada Inc. ("Stifel GMP") and Bloom Burton Securities Inc. for gross proceeds of US$10,075,000 (or C$12,909,000)(the "Offering").

Achieve TMS East/Central Acquisition:

Achieve TMS East was founded in 2016, with a vision of increasing accessibility to TMS therapy in the New England area. Since founding its first TMS center in Northampton, Massachusetts, Achieve TMS East has grown to 14locations in the States of Massachusetts and Connecticut. In 2019, Achieve TMS East's management team expanded its operations in the Midwest United States through the establishment of Achieve TMS Central which currently operates 3TMS centers in the State of Iowa. The acquisition of Achieve TMS East and Achieve TMS Central (the "Acquisition") is expected to enhance Greenbrook's position as a leading provider of TMS therapy in the United States and, following completion of the Acquisition, will add an additional 17TMS centers to the Company's existing service delivery platform, for a total of 149TMS centers.

Key Acquisition Highlights:

* A Profitable Platform with Additional Capacity and Strategic Expansion Opportunities Opportunity to increase capacity at Achieve TMS East's existing TMS centers and to utilize the 14locations in Massachusetts and Connecticut as a springboard for expansion throughout New England. Opportunity to expand Achieve TMS Central operations into the State of South Dakota as well as in other states that are proximate to Greenbrook's current operations in Missouri and Illinois.

* Well-Established Payor Contracting Achieve TMS East/Central's affiliated medical practices benefit from strong reimbursement from key commercial payors. The Acquisition removes the need to establish new contractual relationships with payors, eliminating a process which is a key barrier to expansion.

* Access to Robust Physician Networks Provides Greenbrook with a strong physician network in the States of Massachusetts, Connecticut and Iowa.

* Provides Proven Regional Management Team and Potential Synergies Achieve TMS East/Central has an experienced regional management and operations team and robust infrastructure. Anticipated post-acquisition synergies with Greenbrook's established shared services function.

Pursuant to the purchase agreement, Greenbrook, through its wholly-owned subsidiary TMS NeuroHealth Centers Inc., will indirectly acquire all of the issued and outstanding equity interests in Achieve TMS East and Achieve TMS Central for an aggregate initial cash purchase price of US$8.0 million, net of Achieve TMS East/Central's cash and debt and subject to customary working capital adjustments. In addition, a portion of the total purchase price payable in respect of the Acquisition is subject to a capped earn-out of up to an additional US$2.5 million based on the financial performance of Achieve TMS East during the twelve-month period following completion of the Acquisition.

"We are very pleased to be announcing this acquisition today as we believe it demonstrates our ability to continue to deliver on one of the key pillars of our strategy for sustained growth despite the ongoing disruption caused by the COVID-19 pandemic," said Bill Leonard, President and Chief Executive Officer of Greenbrook. "This acquisition should allow us to continue to expand our national footprint of TMS Centers, particularly in the Northeast and Midwest. This transaction is expected to accelerate our ability to grow in these regions as Achieve TMS East/Central have well-established physician networks and key payor relationships. We are excited to begin working with our new colleagues at Achieve TMS East/Central who share our passion for TMS therapy and delivering exceptional patient care."

"As the clear leader in the delivery of TMS treatment, Greenbrook is the ideal partner to continue the growth of our platform and provide TMS treatment to as many patients as possible", said Linda Rahm, Chief Executive Officer of Achieve TMS East/Central.

The Acquisition is expected to close in the fourth quarter of 2021, subject to customary closing conditions.