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The proposed acquisition is currently subject to a non-binding letter of intent dated March 24, 2022 . Since signing the non-binding letter of intent, the Company has undertaken due diligence and has recently decided to proceed with the negotiation of the definitive transaction agreements. Due to competition concerns related to the acquisition, the name of the target will not be disclosed until after the closing of the transaction, which is expected on or around June 30, 2022 .

The acquisition will be finalized by $7.7 million cash payment to sellers at closing, plus a $1.54 million unsecured promissory note, bearing interest at the rate of 5% per annum payable in 12 months. The Company plans to finance the acquisition through the issuance of debt securities and does not plan to issue any common or preferred stock as part of the purchase price.

For fiscal year 2021, the target was approximately $250 million of assets at the end of the year and generated $6.5 million revenue with an approximate net loss of $954,445 . Target reported revenue growth of 35% in calendar year 2021 and expects continued strong growth over the next 12 months as it moves towards profitability. During the first quarter of 2022, the target broke even and generated approximately $14,000 in net income. The target had approximately $123.4 million long-term debt at the end of the year.

In view of the recently announced letter of intent for Brightpath Capital Corporation and Brightpath Residential Mortgage LP I (“Brightpath” – see the Company’s press release dated May 5, 2022 ), highlights of the combined company and related financial metrics after taking into account contemplated acquisitions include:

  • Pro forma combined assets of approximately $450 million
  • For the year ended December 31, 2021 the main pro forma annual amounts for the combined entity include:
    • Turnover of approx. $29.7 million an increase compared to TIMIA’s consolidated turnover of $9.7 million for fiscal year 2021
    • Operating expenses of approximately $23.5 million an increase over TIMIA’s consolidated operating expenses of $6.7 million for fiscal year 2021
    • Net income after tax of $4.5 million an increase over TIMIA’s consolidated net income of $2.4 million .
  • The acquisition is expected to be accretive to TIMIA shareholders within one year of closing based on expected growth and financing costs incurred.

“We are aggressively growing our business through the acquisition of specialty finance companies like the Brightpath acquisition announced last week and this specialty finance company announced today,” said mike walkinshaw , CEO of TIMIA. “Through these acquisitions, we will have significantly increased our market size and diversified our reach while improving profitability. When complete, we will have reached more than $450 million of assets. Our goal is to be the leading provider of specialist private credit to homeowners, contractors and other organizations across North America while offering unique investment opportunities to Canadian investors. »

Completion of the transaction is subject to the following conditions;

  • Signing of definitive transaction agreements,
  • If required, receipt of approval from the TSX Venture Exchange (the “TSXV”) for the transaction,
  • Receipt of all necessary third-party consents, and
  • Other usual closing conditions.

The transaction is also subject to a severance payment $200,000 payable by Timia Capital if the transaction is not concluded before June 30, 2022 . No brokerage commission is due in connection with the proposed transaction.

The company democratizes private credit for investors by offering a wide range of specialized private credit opportunities with transparency and efficiency, facilitated by the company’s proprietary technology platform. These high-yield lending opportunities are offered through operating divisions: Timia Capital, which offers revenue-based investments to fast-growing software-as-a-service (or SaaS) companies in the North America and Pivot Financial which specializes in asset-based private lending targeting middle market borrowers in Canada . The Company deploys funds on behalf of limited partnerships, institutions, retail investors, high net worth individuals, its management team and shareholders. For more information on TIMIA and SaaS loans, please visit www.timiacapital.com . For more information on Specialized Private Credit and Pivot, please visit: www.pivotfinancial.com

mike walkinshaw CEO
Timia Capital Corporation

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Forward-looking information

Certain information and statements contained in this press release contain and constitute forward-looking information or forward-looking statements as defined by applicable securities laws (collectively, “forward-looking statements”). Forward-looking statements normally contain words such as “believe”, “expect”, “anticipate”, “plan”, “intend”, “continue”, “estimate”, “may”, “will” , ‘should’, ‘ongoing” and similar expressions, and in this press release include any statements (whether express or implied) regarding the completion of the transaction, the future performance of the combined companies, the execution of the definitive documentation of the transaction, the terms of closing the transaction, including TSXV approval, the creation of future shareholder value, the completion of the transaction with Brightpath and the performance of the combined business, growth and profitability future of the Target, the creation of shareholder value following the completion of the transaction, the revenue growth of the company’s investment portfolio and expectations regarding other investments in the months coming. Forward-looking statements are not guarantees of future performance, actions or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable and appropriate under the circumstances, including, without limited to the following assumptions: conditions to the completion of the proposed transaction will be satisfied, that the Company will complete its proposed transaction with Brightpath, that the Company is able to achieve its future objectives and priorities, assumptions regarding the growth general economic conditions and the absence of unforeseen changes in the Company’s legislative and regulatory framework.

Although management believes the forward-looking statements are reasonable, actual results could differ materially due to risks and uncertainties associated with and inherent in Timia’s business. The material risks and uncertainties applicable to the forward-looking statements set forth herein include, but are not limited to: the conditions of the proposed transaction not being satisfied; that the proposed transaction with Brightpath will not be finalized; that the Target Company will not achieve its growth and profitability objectives; the Company not having sufficient financial resources to carry out the proposed transaction and achieve its objectives; intense competition in all aspects of business; reliance on limited management resources; general economic risks; new laws and regulations and litigation risks. Although Timia has attempted to identify factors that could cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements, there may be other factors that cause actions, events or results not to be those anticipated, predicted, estimated. or planned. In addition, many factors are beyond Timia’s control. Accordingly, readers should not place undue reliance on forward-looking statements. Timia undertakes no obligation to reissue or update any forward-looking statements as a result of new information or events after the date hereof, except as required by law. All forward-looking statements contained in this press release are qualified by this cautionary statement.

SOURCE Timia Capital Corp.

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