Canada: February 2017 Deal Round-Up

The following is a selection of major deals in the life science space that closed or were announced as closed in February 2017.

MERGERS & ACQUISITIONS

Date: February 13, 2017

Type: Acquisition

Target: Apteryx, Inc. ("Apteryx")

Acquirer: LED Medical Diagnostics Inc. ("LED") (TSX.V: LMD)

Agent(s): Bloom Burton Securities Inc.

Deal size: Aggregate consideration of US $10.25 million

Description: On February 13, 2017, LED announced that it had completed its acquisition of 100% of the capital stock of Apteryx for aggregate consideration of US $10.25 million. LED paid US $6.987 million in cash and issued approximately 33.9 million common shares of LED at CDN$0.07 per share towards satisfaction of the purchase price, with an additional US $1.2 million to be paid in cash in tranches over the next 18 months from closing and the final payment of US $450,000 to be paid in common shares or cash at LED's option 24 months from closing. Concurrent with the acquisition, LED closed a series of financings (see below in "Financings" for details) a portion of which was used to fund the acquisition of Apteryx.

FINANCINGS

Date: February 13, 2017

Type: Brokered and non-brokered private placements

Issuer: LED Medical Diagnostics Inc.

Agent(s): Bloom Burton Securities Inc.

Deal size: Gross proceeds of approximately US $14.4 million

Description: Concurrent with LED's acquisition of Apteryx (see above in "Mergers & Acquisitions" for details), LED announced on February 13, 2017 that it had completed a series of brokered and non-brokered private placements of both equity and debenture units as follows:

  • a brokered private placement of equity units of LED (each an "Equity Unit"), at a price of $0.06 per Equity Unit for gross proceeds of approximately CDN $11.5 million, with each Equity Unit consisting of one common share and one-half of one common share purchase warrant (each whole common share purchase warrant, a "Warrant"), with each Warrant exercisable for a period of 24 months into one common share of LED at a price of $0.10 per common share;
  • a brokered private placement of 88 debenture units of LED (the "Debenture Units") for gross proceeds of CDN $880,000, with each Debenture Unit consisting of CDN $10,000 principal value 12% senior secured debentures maturing 24 months from the closing date and 21,250 common shares of LED;
  • a non brokered private placement of Equity Units for gross proceeds of approximately CDN $1.8 million;
  • a non-brokered private placement of 27 Debenture Units for gross proceeds of CDN $270,000.

A portion of the net proceeds was used to fund the acquisition of Apteryx. LED, through its wholly owned subsidiaries, provides dentists and oral health specialists with diagnostic imaging products and software.

Date: February 15, 2017

Type: Short-form prospectus offering

Issuer: CannaRoyalty Corp. ("CannaRoyalty") (CSE: CRZ)

Underwriter(s): A syndicate of underwriters led by Canaccord Genuity Corp.

Deal size: Aggregate gross proceeds of CDN $15 million

Description: On February 15, 2017, CannaRoyalty announced the closing of a short-form prospectus offering (the "Offering") for aggregate gross proceeds of CDN $15,000,000. The Offering was for an aggregate of 5,000,000 units (the "Units") at a price of $3.00 per Unit. Each Unit comprises one common share of CannaRoyalty (a "Common Share") and half of one Common Share purchase warrant (each whole Common Share purchase warrant, a "Warrant"). Each Warrant is exercisable to acquire one Common Share (a “Warrant Share”) for a period of 2 years at an exercise price of $4.50 per Warrant Share. The Warrants will be subject to a 21-day forced exercise provision if CannaRoyalty’s daily volume weighted average share price is greater than $6.00 for 15 consecutive trading days following closing. The Offering was completed by a syndicate of underwriters led by Canaccord Genuity Corp.

Date: Announced as closed on February 23, 2017

Type: Series A financing

Issuer: Fusion Pharmaceuticals Inc. ("Fusion")

Investor(s): Johnson & Johnson Innovation, HealthCap, TPG Biotech, Genesys Capital, Fight Against Cancer Innovation Trust

Deal size: US $25 million (approx. CDN $32.78 million)

Description: On February 23, 2017, Hamilton-based Fusion announced the closing of a US $25 million Series A financing led by Johnson & Johnson Innovation, and with investments by HealthCap, TPG Biotech, Genesys Capital and Fight Against Cancer Innovation Trust. Fusion will use the proceeds to advance its lead program, an antibody-targeted radiotherapy for treatment of refractory cancers, into human clinical trials.

Date: February 23, 2017

Type: Non-brokered private placement

Issuer: ProMIS Neurosciences Inc. ("ProMIS") (TSX: PMN)

Deal size: CDN $2,719,813

Description: On February 23, 2017, ProMIS announced the closing of its non-brokered private placement, originally announced on February 6, 2017, for total gross proceeds of CDN $2,719,813. ProMIS issued a total of 18,757,331 units (“Units”) at $0.145 per Unit in two closings raising gross proceeds of CDN$2,719,813, with 15,848,863 Units being issued in the first closing (as announced on Feb. 13, 2017) and the balance in the second closing.  Each Unit consisted of one common share of the Company and one-half of a common share purchase warrant, with each whole warrant being exercisable into one common share at a price of $0.20 per share for 36 months from the issue date. ProMIS develops therapeutics for neurodegenerative diseases such as Alzheimer's Disease and ALS.

Date: February 24, 2017

Type: Brokered and non-brokered private placements

Issuer: RepliCel Life Sciences Inc. ("RepliCel") (TSX.V: RP)

Agent(s): Echelon Wealth Partners Inc. (“Echelon”), Haywood Securities Inc. and Clarus Securities Inc. (collectively, the "Agents")

Deal size: Total gross proceeds of CDN $3,165,125

Description: On February 24, 2017, RepliCel completed a financing for total gross proceeds of CDN $3,165,125. The financing consisted of a brokered private placement of 2,181,300 units (each a “Unit”) at a price of $1.25 per Unit (the “Brokered Financing”) and a non-brokered private placement of 350,800 Units at a price of $1.25 per Unit (the “Non-Brokered Financing” and, together with the Brokered Financing, the “Financing”). Each Unit consisted of one common share of the Company (each, a “Share”) and one share purchase warrant (each, a “Warrant”), with each Warrant entitling the holder to purchase one additional Share for a period of three years from the closing of the Financing at a price of $2.00 per Share. RepliCel is a regenerative medicine company focusing on developing autologous cell therapies for certain conditions.

Date: February 28, 2017

Type: Bought deal private placement

Issuer: Aurora Cannabis Inc. ("Aurora") (TSX.V: ACB)

Underwriter(s): A syndicate of investment dealers led by Canaccord Genuity Corp. and including Cormark Securities Inc., Eight Capital, Mackie Research Capital Corporation and GMP Securities L.P. (collectively, the "Underwriters")

Deal size: Gross proceeds of $75 million

Description: On February 28, 2017, Aurora announced the completion of a bought deal private placement, pursuant to which Aurora issued 33,333,357 units ("Units") at a price of $2.25 per Unit for gross proceeds of $75 million. Each Unit was comprised of one common share of Aurora (a "Common Share") and half of one common share purchase warrant (each whole common share purchase warrant, a "Warrant"). Each Warrant is exercisable to acquire one Common Share of Aurora (a "Warrant Share") for a period of 2 years at an exercise price of $3.00 per Warrant Share, subject to adjustments and acceleration under certain circumstances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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