Lifespeak Inc. has entered into a deal to take the company private, offering shareholders $0.32 per common share in a transaction that follows a months-long strategic review and aims to address its ongoing debt and liquidity issues, the company announced Thursday
The Toronto-based wellbeing solutions provider said the cash offer, representing a 28 per cent premium over its 20-day average trading price, is backed by a group of investors including Beedie Capital, company executives and new and existing shareholders
The plan of arrangement comes as Lifespeak continues to grapple with fallout from a 2022 acquisition that left it with substantial debt. In February, it defaulted on a term loan and entered into forbearance agreements with its lenders.
Those agreements have now been extended, with senior lenders committing to a new extended credit facility, contingent on the completion of the transaction. Beedie Capital, a key creditor, also agreed to forbear enforcement actions for now and will convert debt into preferred shares in the new private entity.
Major shareholders back the deal
The deal has the backing of investors holding more than three-quarters of Lifespeak’s outstanding common shares, who have agreed to exchange their equity into the private entity. These “rolling shareholders,” including management and earlier private placement participants, represent 76.6 per cent of the current shareholder base.
The transaction will see the new investor group take full ownership of Lifespeak, with the company expected to amalgamate with the purchaser post-closing and delist from the Toronto Stock Exchange. The board plans to seek an exemption from continuous disclosure requirements under securities law following the transaction.
Governance and fairness assessments
A special committee of independent directors unanimously recommended the deal after reviewing it with legal and financial advisors. INFOR Financial Inc. and Doane Grant Thornton LLP provided fairness opinions, concluding the offer was fair to shareholders not participating in the equity rollover.
CEO Michael Held said the transaction allows Lifespeak to reduce debt and continue its growth plans. “This transaction will provide us with the ability to de-lever the business and execute on our plan for long-term growth,” he said.
Next steps and conditions
To proceed, the transaction requires approval by two-thirds of shareholders voting at a special meeting, along with a majority vote excluding interested parties, as required under securities law. Court and regulatory approvals are also necessary.
Shareholders will receive detailed information in a management circular to be filed on SEDAR+ ahead of the meeting.
