CareRx Corporation Announces $70 million Debt Refinancing

TORONTO, Dec. 11, 2023 /CNW/ - CareRx Corporation ("CareRx" or the "Company") (TSX: CRRX) today announced that it has entered into a binding commitment for a comprehensive refinancing transaction (the "Refinancing") with a syndicate of lenders led by a Canadian Schedule I chartered bank (the "Lenders") and arranged and managed by Crown Private Credit Partners Inc. ("Crown Private Credit").

"Crown Private Credit has been an extremely valued partner and we are excited to advance our relationship with this refinancing," said Puneet Khanna, President & Chief Executive Officer of CareRx. "This refinancing represents a major milestone for the Company as we continue to strengthen our balance sheet, lower our overall cost of capital, and improve our cash generation in order to better position the Company to capitalize on future growth and margin-expansion opportunities." 

Under the terms of the Refinancing:

• The Lenders will provide a $20 million senior secured revolving operating loan (the "Operating Loan") and a $50 million senior secured term loan (the "Term Loan", and together with the Operating Loan, the "Credit Facilities").
• The Company intends to use the proceeds of the Credit Facilities, plus available cash on hand, to repay $78 million of existing debt, including its existing $58 million term loan with Crown Private Credit and $20 million of subordinated debt.
• $47 million of the Term Loan and a portion of the Operating Loan will initially be drawn at closing, with future draws on the Term Loan available to fund certain capital expenditures.
• The Credit Facilities have a five-year term, with a floating interest rate that will initially accrue at the rate of prime plus 2.75% at closing, with downward adjustments to as low as prime plus 2.00% as the Company's net senior debt to trailing-twelve-month EBITDA declines.
• Compared to its existing term loan and subordinated debt, the Company expects to initially save up to $1 million annually in interest charges.

"Expanding our relationship with supportive lenders including Crown Private Credit and a Canadian bank is an important step in our evolution as Canada's largest provider of pharmacy services to seniors living communities," added Andrew Mok, Chief Financial Officer of CareRx. "As a result of the Refinancing, the Company will benefit from a more simplified and strengthened capital structure, a unified syndicate of lenders and, importantly, the addition of a revolving operating loan which will allow the Company to utilize its cash on hand to reduce the Company's debt servicing costs and provide it with significantly greater financial flexibility."

The Refinancing is subject to customary closing conditions and is anticipated to close on or before December 31, 2023. However, there is no guarantee that closing will occur on such timeline, if at all.

About CareRx Corporation

CareRx is Canada's leading provider of pharmacy services to seniors living communities. We serve approximately 94,000 residents in over 1,500 seniors and other congregate care communities (long-term care homes, retirement homes, assisted living facilities, and group homes). We are a national organization with a large network of pharmacy fulfillment centres strategically located across the country. This allows us to deliver medications in a timely and cost-effective manner and quickly respond to routine changes in medication management. We use best-in-class technology that automates the preparation and verification of multi-dose compliance packaging of medication, providing the highest levels of safety and adherence for individuals with complex medication regimes. We take an active role in working with our home operator partners to promote resident health, staff education, and medication system quality and efficiency.

Forward-Looking Statements

This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation, including statements relating to the Refinancing. These forward-looking statements include, among others, statements regarding the Company's business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate" or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management.

Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements. Factors that could cause such differences include the Company's general business risks, exposure to and reliance on government regulation and funding, the Company's liquidity and capital requirements, exposure to epidemic or pandemic outbreak, reliance on contracts with key customers and other risk factors described from time to time in the reports and disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements and neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The factors underlying current expectations are dynamic and subject to change.

SOURCE CareRX Corporation

visit www.carerx.ca or contact Puneet Khanna, President & Chief Executive Officer, CareRx Corporation, [phone]; Andrew Mok, Chief Financial Officer, CareRx Corporation, [phone]; Neil Weber, Investor Relations, LodeRock Advisors, [phone], [email protected], www.loderockadvisors.com