DEFA14A: Neuronetics and Greenbrook TMS Announce Interim Order for Proposed Arrangement, Shareholder Meetings Scheduled

Neuronetics and Greenbrook TMS have received an interim order from the Ontario Superior Court of Justice for their proposed all-stock transaction, with shareholder meetings scheduled for November 8, 2024.

Summary

• Neuronetics and Greenbrook TMS have announced the receipt of an interim order from the Ontario Superior Court of Justice regarding their proposed arrangement.
• The arrangement involves Neuronetics acquiring all outstanding common shares of Greenbrook in an all-stock transaction.
• The interim order authorizes the calling and holding of a special meeting of Greenbrook shareholders.
• Each Greenbrook share is expected to be exchanged for 0.01149 of a share of Neuronetics common stock, subject to adjustments.
• Post-arrangement, pre-arrangement Neuronetics stockholders are expected to own approximately 57% and Greenbrook shareholders approximately 43% of the combined company on a fully diluted basis.
• Both the Greenbrook and Neuronetics boards of directors unanimously recommend that their respective shareholders vote in favor of the arrangement.
• The Greenbrook Special Meeting will be held on November 8, 2024, in a virtual-only format.
• The Neuronetics Special Meeting will also be held on November 8, 2024, in a virtual-only format.
• Implementation of the arrangement is subject to shareholder approval at both special meetings.

Sentiment

Score: 7

Explanation: The sentiment is cautiously optimistic. The announcement confirms progress on the merger, but the numerous risk factors and forward-looking statements temper enthusiasm.

Positives

• The boards of both companies unanimously recommend that shareholders vote in favor of the arrangement.
• The interim order is a necessary step towards completing the proposed arrangement.
• The combined company is expected to benefit from synergies and growth opportunities.
• Greenbrook has provided more than 1.61 million treatments to over 49,000 patients struggling with depression.
• NeuroStar Advanced Therapy is the leading TMS treatment for MDD in adults with over 6.4 million treatments delivered.

Negatives

• The arrangement is subject to shareholder approval and other closing conditions.
• There are risks associated with the integration of the two companies.
• The stock prices of both companies could decline if the arrangement is not completed.

Risks

• Uncertainty regarding the timing and completion of the arrangement.
• Potential termination of the arrangement agreement.
• Failure to satisfy all conditions for consummation of the arrangement.
• Disruption of management's attention from ongoing business operations.
• Effect of the arrangement on customer relationships and business operations.
• Outcome of legal proceedings related to the arrangement.
• Retention of employees of Greenbrook following the completion of the arrangement.
• Decline in stock prices if the arrangement is not completed.
• The combined company's ability to successfully sell its products and the market reception to and performance of its products.
• The combined company's ability to manage growth.
• The combined company's ability to obtain additional or suitable financing.
• The combined company's ability to expand product offerings.
• The combined company's ability to compete with others in its industry.
• The combined company's ability to protect its intellectual property.

Future Outlook

The combined company expects to benefit from growth opportunities and synergies, but the realization of these benefits is subject to various risks and uncertainties.

Management Comments

• The Greenbrook Board unanimously recommends that the Greenbrook Shareholders vote in favour of the resolution relating to the Arrangement at the Greenbrook Special Meeting.
• The Neuronetics Board unanimously recommends that Neuronetics Stockholders vote in favor of the resolutions relating to the Arrangement at the special meeting of Neuronetics Stockholders.

Industry Context

The merger reflects a trend towards consolidation in the mental health treatment sector, with companies seeking to expand their service offerings and geographic reach.

Comparison to Industry Standards

• It is difficult to compare this transaction to industry standards without knowing the specific financial details and valuation metrics.
• Comparable transactions in the healthcare services sector often involve multiples of revenue or EBITDA.
• The success of the merger will depend on the combined company's ability to integrate operations, achieve synergies, and maintain customer relationships.
• Key competitors in the TMS and mental health treatment space include companies like MagVenture, Brainsway, and Acadia Healthcare.

Stakeholder Impact

• Shareholders of both companies will be impacted by the merger, with potential changes in ownership and stock value.
• Employees of both companies may experience changes in roles and responsibilities.
• Customers of both companies can expect a broader range of services and potentially improved treatment options.

Next Steps

• Greenbrook Shareholders to vote on the Arrangement at the Greenbrook Special Meeting on November 8, 2024.
• Neuronetics Stockholders to vote on the Arrangement at the Neuronetics Special Meeting on November 8, 2024.
• Satisfaction or waiver of all applicable conditions precedent to complete the Arrangement.

Key Dates

Keywords

Neuronetics, Greenbrook TMS, Arrangement, Merger, Acquisition, Shareholder Meeting, TMS, NeuroStar, Greenbrook Shares, Neuronetics Shares