Mainstreet Health Investments Inc. announces closing of US$95 million public offering
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TORONTO, JUNE 2, 2016 – Mainstreet Health Investments Inc. (“Mainstreet” or the “Corporation”) (TSX:HLP.U) today announced that it has completed its public offering of 9,500,000 common shares (“Common Shares”) of the Corporation (the “Offering”) for gross proceeds of US$95,000,000. The Offering was conducted through a syndicate of underwriters led by BMO Capital Markets, CIBC Capital Markets and National Bank Financial Inc. The underwriters have been granted an overallotment option, exercisable at any time up to 30 days following closing of the Offering, to purchase up to an additional 1,425,000 Common Shares, which, if exercised in full, will increase the total gross proceeds of the Offering to US$109,250,000.
The majority of the net proceeds from the Offering will be used by the Corporation to acquire, directly and indirectly, 13 seniors housing and care properties. The remaining net proceeds will be used to repay financing in connection with the acquisition of one of the Corporation’s properties, provide mezzanine financing, fund capital improvement projects and for working capital purposes.
Prior to the closing of the Offering, the Common Shares and non-voting shares (“Non-Voting Shares”) of the Corporation were consolidated on the basis of one post-consolidation Common Share for every 250 pre-consolidation Common Shares and one post-consolidation Non-Voting Share for every 250 pre-consolidation Non-Voting Shares.
In connection with the closing of the Offering, certain funds managed by Magnetar Financial LLC exchanged their interests in the Corporation’s subsidiary, Mainstreet Health Holdings Inc., for approximately 11,635,104 post-consolidation Common Shares, representing approximately 51.1% of the outstanding Common Shares.
Also in connection with the closing of the Offering, all of the outstanding Non-Voting Shares were converted by Mainstreet Investment Company, LLC (“Mainstreet LLC”), on a one-for-one basis, into Common Shares (the “Conversion”). Following the Conversion, Mainstreet LLC owns 1,555,279 post-consolidation Common Shares, representing approximately 6.8% of the outstanding Common Shares.
The Corporation intends to declare and pay monthly dividends in the estimated amount of US$0.06139 per Common Share. Dividends will be declared and paid to the holders of Common Shares of record as at the close of business on the last business day of each month. The first dividend will be paid on July 15, 2016 in the estimated amount of US$0.05729 for the period from closing of the Offering to June 30, 2016.
The Common Shares are listed on the Toronto Stock Exchange under the symbol “HLP.U”.
The securities offered pursuant to the Offering have not and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any U.S. State securities laws and may not be offered or sold, directly or indirectly, within the United States or its territories or possessions or to or for the account of any U.S. person (as defined in Regulation S under the U.S. Securities Act) other than pursuant to an available exemption from the registration requirements of the U.S. Securities Act and in compliance with U.S. State securities laws. This press release does not constitute an offer to sell or a solicitation of an offer to buy any such securities within the United States, or its territories or possessions, or to or for the account of any U.S. person.
About Mainstreet Health Investments Inc.
Upon completion of the acquisition of the properties described in Mainstreet’s final long form prospectus dated May 26, 2016, the Corporation will indirectly own 24 seniors housing and care properties in the states of Illinois, New York, Pennsylvania, Kansas and Indiana. The properties will be leased to experienced tenant operators under triple net leases.
For more information visit www.mainstreethealthinvestments.com.
Caution Regarding Forward Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends”, “goal” and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward looking statements and information concerning the completion of the acquisition of the properties and the mezzanine financing and the payment of dividends. The forward-looking statements and information are based on certain key expectations and assumptions made by Mainstreet, including that the conditions to closing of each of the acquisition of the properties and the mezzanine financing will be satisfied or waived. Although Mainstreet believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Mainstreet can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, Mainstreet not obtaining regulatory approval for one or more of the transactions, Mainstreet not being able to assume the financing for the acquisition of the properties and the conditions to the acquisition of the properties and the mezzanine financing not being satisfied or waived. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward looking information for anything other than its intended purpose. Mainstreet undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE Mainstreet Health Investments Inc.
For further information: Investors: Mr. Randy Henry, Director – Investor Relations, 1-317-582-6971, firstname.lastname@example.org; Media: Ms. Ashley Mattox, Communications Manager, email@example.com