Crown Partners Fund Completes Term Loan with Centric Health for up to $30 Million
Centric to acquire Remedy’sRx specialty pharmacy business, creating the largest specialty
pharmacy business in Canada
CALGARY, March 31, 2020 – Crown Capital Partners Inc. (“Crown” or the “Corporation”) (TSX: CRWN), a capital partner to entrepreneurs and growth businesses, today announced that Crown Partners Fund, an investment fund managed by Crown and in which Crown holds an approximate 39% interest, has completed a term loan of up to $30 million (the “Agreement”) with Centric Health Corporation (“Centric”) (TSX: CHH), a leading provider of pharmacy and other healthcare services to Canadian seniors.
Centric provides specialty pharmacy and other healthcare services to Canadian seniors living in assisted living and long-term care facilities. The company operates a large national network of pharmacy fulfilment centres that deliver high-volume solutions for the cost-effective supply of chronic medication and other specialty clinical pharmacy services, serving more than 31,000 residents in over 460 seniors’ communities nationally. Centric is headquartered in Toronto and operates 14 pharmacy and fulfillment locations in British Columbia, Alberta, Saskatchewan and Ontario.
Crown’s term loan will be used to refinance Centric’s existing senior debt and support Centric’s acquisition of the specialty pharmacy business of Remedy’sRx. Remedy’sRx operates the 5th largest specialty pharmacy business in Canada, and the acquisition positions Centric as the largest specialty pharmacy in Canada, serving approximately 50,000 residents.
“We are pleased to partner with Centric’s proven and experienced management team as they continue to reposition their business to an institutional pharmacy business and execute on this transformative acquisition,” said Chris Johnson, Crown’s President & CEO. “There is an increasing need in Canada for efficient, low cost pharmaceutical services for senior citizens and, as the largest dedicated provider, Centric will be well positioned to capture this projected growth both organically and through additional acquisitions. We believe that Centric supports an essential component of Canada’s health care system and it should be a strong performer in recessionary conditions.”
“This transaction is the culmination of our strategic transformation in the past two years, and it marks the start of an exciting new chapter for our company,” said David Murphy, President and Chief Executive Officer of Centric Health. “Together with Remedy’sRX, we will be well positioned to accelerate growth and lead the consolidation of a fragmented industry. Crown’s customized facility was a good match for our needs, and we are pleased to have their support to enable this transaction.”
The Agreement provides for a term loan of up to $30 million, of which Crown Partners Fund has advanced $22 million to repay Centric’s senior debt facility and for working capital purposes. An additional $5 million will be advanced upon the close of the Remedy’sRx acquisition, with the remaining $3 million available to be drawn within a 12-month period. The term loan bears a fixed interest rate of 10% per annum, matures in 60 months, and includes the issue to Crown Partners Fund of warrants to acquire 7,200,000 common shares of Centric at an exercise price of $0.25 per common share.
This investment brings the total loans outstanding in Crown Partners Fund to $235 million across 12 companies.
About Crown Capital Partners (TSX:CRWN)
Founded in 2000, Crown is a leading specialty finance company that provides growth capital to a diversified group of successful mid-market companies that are seeking alternatives to banks and private equity funds. Crown provides customized solutions in the form of loans, royalties, and other structures with minimal or no ownership dilution. In addition to deploying capital as a principal investor, Crown develops, manages and co- invests in alternative investment funds, including Crown Partners Fund and Crown Capital Power Fund.
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