NBLY Neighbourly Pharmacy Inc

/THIS MEDIA RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

- Closing of Acquisition Scheduled for June 27, 2022 -

TORONTO, June 7, 2022 /CNW/ - Neighbourly Pharmacy Inc. (TSX: NBLY) ("Neighbourly" or the "Company"), is pleased to announce that it has received a "no-action letter" from the Competition Bureau to proceed with its previously announced acquisition of Rubicon Pharmacies ("Rubicon").

"We are pleased that the Competition Bureau has concluded its review of this combination of Canada's community pharmacy leaders," stated Chris Gardner, the Company's Chief Executive Officer. "The acquisition of Rubicon will ideally position Neighbourly to continue to grow its presence across Canada and expand its role as a leader in community pharmacy.  Rubicon's pharmacies are similar to our own, acting as the centre of healthcare delivery for smaller, underserved communities. However, our greatest similarity is our shared values: both companies place an unmatched priority upon patient-focused care."

As part of the agreement with the Competition Bureau, the Company has agreed to sell two pharmacy locations in Saskatchewan. Net of the sale of these two locations, the Rubicon acquisition will enable Neighbourly to expand its network by 100 locations across key Western Canadian provinces and increase its Pro Forma Adjusted EBITDA¹ by $41 million. 

Neighbourly is also pleased to announce that it has received waivers from the majority of third parties for the right of first refusal ("ROFRs").  The final outstanding waiver is expected imminently subject to the execution of customary franchise agreements, which are currently being finalized. Neighbourly expects to be able to acquire 100% of locations that were subject to a ROFR.

Subject to the satisfaction of customary conditions for transactions of this nature, Neighbourly expects the completion of the acquisition to occur on June 27, 2022.

Neighbourly is Canada's largest and fastest growing network of community pharmacies. United by their patient first focus and their role as essential and trusted healthcare hubs within their communities, Neighbourly's pharmacies strive to provide accessible healthcare with a personal touch. Since 2015, Neighbourly has expanded its diversified national footprint to include 271 locations (on a pro forma basis, after giving effect to the acquisition of Rubicon), reinforcing the Company's reputation as the industry's acquirer of choice.

This news release makes reference to certain non-IFRS measures that are used by the Company and Rubicon as indicators of financial performance, such as, (a) with respect to Neighbourly: Pro Forma Adjusted EBITDA, and (b) with respect to Rubicon: Rubicon Adjusted EBITDA (as a measure forming part of Neighbourly's Pro Forma Adjusted EBITDA). Refer to the Company's Management's Discussion and Analysis dated February 15, 2022 for the 16-week and 40-week periods ended January 1, 2022, which is available under the Company's profile on SEDAR at www.sedar.com, for an explanation of the composition of Pro Forma Adjusted EBITDA, an explanation of how such non-IFRS measure provides useful information to investors and the additional purposes for which management uses Pro Forma Adjusted EBITDA. Rubicon Adjusted EBITDA is defined as profit (loss) for the twelve-month period ended September 30, 2021 before income tax expense (recovery), finance (income) costs, net, depreciation and amortization, and other expenses. These measures are not recognized under International Financial Reporting Standards ("IFRS") and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. These non-IFRS measures are used to provide readers with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that market participants frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. See the financial table at the conclusion of this news release for a reconciliation of these non-IFRS measures to the most directly comparable IFRS measures.

The financial information of Neighbourly referred to in this news release is reported in Canadian dollars and have been prepared in accordance with IFRS. All financial information of Rubicon referred to in this news release is reported in Canadian dollars and has been derived from audited and unaudited historical financial statements of Rubicon that were prepared in accordance with Canadian accounting standards for private enterprises. The recognition, measurement and disclosure requirements of Canadian GAAP applicable to private enterprises differ from those of Canadian GAAP applicable to publicly accountable enterprises, which are IFRS.

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking information may relate to our future financial results and may include information regarding our financial position, business strategy, growth strategies, financial results, taxes, dividend policy, plans and objectives. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "estimates", "outlook", "forecasts", "projection", "prospects", "intends", "anticipates", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. Forward-looking information in this news release includes, among other things, statements relating to the Acquisition and associated anticipated benefits, the closing of the Acquisition and timing thereof, the fact that closing of the Acquisition is conditional on certain events occurring, and the receipt of all necessary regulatory and other approvals.

Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that the Company considered appropriate and reasonable as of the date such statements are made in light of its experience and perception of historical trends, current conditions and expected future developments. Such estimates and assumptions include assumptions in respect of our ability to build our market share; our ability to retain key personnel; our ability to maintain and expand geographic scope; our ability to execute on our expansion plans; our ability to continue investing in infrastructure to support our growth; our ability to obtain and maintain existing financing on acceptable terms; currency exchange and interest rates; the impact of competition; the changes and trends in our industry or the global economy; the changes in laws, rules, regulations, and global standards, the satisfaction of all conditions of closing and the successful completion of the Acquisition within the anticipated timeframe, including receipt of regulatory and other required approvals ; the estimated purchase price of the Acquisition, including post-closing adjustments; the receipt of consent of third parties to the change of control triggered by the Acquisition under relevant agreements and store leases; the successful and timely integration of Rubicon in the timeframe anticipated; the realization of the anticipated benefits, economies of scale, operating efficiencies, costs savings and synergies of the Acquisition in the timeframe anticipated, including impacts on growth and accretion in various financial metrics; and the absence of significant undisclosed costs or liabilities associated with the Acquisition, are material factors made in preparing forward-looking information and management's expectations.

Further, forward-looking information is subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks and uncertainties related to the Acquisition, including the failure to complete the Acquisition in all material respects in accordance with the purchase agreement with respect to the Acquisition; the failure to obtain, in a timely manner or at all, regulatory and other required approvals , or to otherwise satisfy the conditions to the completion of the Acquisition; necessary borrowings under the Company's credit facilities may not be available to fund a portion of the Acquisition; risks related to increased indebtedness after completion of the Acquisition; the failure to receive consents of third parties to the change of control triggered by the Acquisition under relevant agreements and store leases; the failure to realize the anticipated benefits, economies of scale, operating efficiencies, costs savings and synergies of the Acquisition in the timeframe anticipated, or at all; the materiality of post-closing adjustments under the purchase agreement; the Rubicon business may be adversely impacted during the pendency of the Acquisition; the risk of potential unforeseen difficulties in integrating the Rubicon business into the Company's systems and operations; risks related to the dependence of the Company on key employees and the loss of certain key Rubicon personnel; significant undisclosed costs or liabilities associated with the Acquisition may be discovered; risks of reliance on information provided by Rubicon and the risk of inaccurate or incomplete information, historical and/or stand-alone financial information may not be representative of future performance, uncertainty as to expected financial condition and economic performance following the completion of the Acquisition, and heightened exposure to regulatory environment in the Canadian Prairies following the Acquisition; as well as other factors discussed or referred to in the Company's Management's Discussion and Analysis for the 16-week and 40-week periods ended January 1, 2022 and under the heading "Risk Factors" in the final long form prospectus dated May 17, 2021 filed in connection with the initial public offering of Neighbourly, both of which are available on SEDAR at www.sedar.com under the Company's profile. If any of these risks or uncertainties materialize, or if the opinions, estimates, or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information.

Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this news release represents the Company's expectations as of the date of this news release (or as the date they are otherwise stated to be made) and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. All of the forward-looking information contained in this news release is expressly qualified by the foregoing cautionary statements.

Reconciliation from IFRS to Non-IFRS Measures

Reconciliation of Rubicon's Pro Forma Adjusted EBITDA  

SOURCE Neighbourly Pharmacy Inc.