Tribe completes the previously announced acquisition (the "Acquisition") of Toronto-based DMSI Holdings Ltd ("DMSI"), including its three subsidiaries. With this Acquisition, Tribe is expected to be on a proforma revenue run-rate of over $31 million with improved profitability.
To fund the Acquisition, Tribe completed the previously announced non-brokered private placement to raise aggregate gross proceeds of up to $3,665,439.40 which was led by Round 13 Growth II, L.P., d.b.a. PROPELR Growth ("PROPELR"), a highly respected, late-stage growth equity investment fund, and also included the participation of the operators of DMSI.
VANCOUVER, BC, June 5, 2024 /CNW/ - Tribe Property Technologies Inc. (TSXV: TRBE) (OTCQB US: TRPTF) ("Tribe" or the "Company"), a leading provider of technology-elevated property management solutions, is pleased to announce the completion of the acquisition (the "Acquisition") of DMSI, including three operating subsidiaries of DMSI; DMS Property Management Ltd. ("DMS Property"), Del Management Solutions Inc. ("Del Management"), and Delcom Management Services Inc. ("Delcom"), through its wholly-owned subsidiary Tribe Management Inc. ("Tribe Management").
Tribe Property Technologies Inc. Logo (CNW Group/Tribe Property Technologies Inc.)
Joseph Nakhla, CEO of Tribe, commented on the acquisition, "We are excited to complete the acquisition of DMSI and welcome their talented team to Tribe. The synergies between our existing capabilities and DMSI's profitable, robust recurring business and established expertise offers a unique opportunity to transform the property management industry. This collaboration is particularly exciting as each of the DMSI operating companies bring a distinct and valuable portfolio to our rental management division. Additionally, I am pleased to announce that we have completed the previously announced non-brokered private placement for $3,665,439.40 million. This funding has facilitated the acquisition of DMSI and positions the Company to pursue its remaining growth initiatives for the rest of 2024."
The Acquisition propels Tribe's proforma annualized revenue run-rate to over $31 million and significantly improves the Company's profitability profile. In addition, the Acquisition expands the Company's footprint in residential rental and commercial property management.
The DMSI group of companies brings different areas of expertise to Tribe's growing portfolio - DMS Property specializes in multi-residential rental property management, while Del Management brings in its government contracts and project management services, and lastly, Delcom has a strong domain of commercial management services.
Transaction Details:
Tribe Management acquired all of the issued and outstanding shares of DMSI in consideration for $13,000,000 (the "Purchase Price"). The Purchase Price was satisfied as follows: (i) $10,000,000 in cash paid on closing, subject to adjustment; and (ii) $3,000,000 payable by promissory note.1
Tribe is funding the Purchase Price through cash on hand, drawing on the Company's acquisition debt facility and the Financing (as detailed below).
The vendors and DMSI are at arm's length from Tribe. No finder's fees were paid in connection with the Acquisition.
Financing:
In connection with the Acquisition, the Company conducted a non-brokered private placement of 7,048,921 units of the Company (each, a "Unit") at a price of $0.52 per Unit to raise aggregate gross proceeds of $3,665,439.40 (the "Financing"). Each Unit consists of one common share of the Company (a "Common Share") and one-half of one Common Share purchase warrant (each whole Common Share purchase warrant, a "Warrant"). Each Warrant entitles the holder to purchase one Common Share at a price of $0.82 at any time on or before that date which is five years after the closing date of the Financing. The net proceeds of the Financing have been used by the Company to complete the Acquisition.
PROPELR Growth ("PROPELR") led the Financing by subscribing for 4,615,385 Units for aggregate gross proceeds of $2,400,000.20 (the "Lead Order"). The Financing also included participation by the operators of DMSI for an aggregate of 961,538 Units.
All securities issued under the Financing are subject to a hold period expiring four months and one day from the closing date. In connection with the Financing, the Company paid an aggregate of $10,812 to Ventum Financial Corp. and Cormark Securities Inc. in consideration for introducing subscribers to the Financing.
PROPELR is a "related party" of the Company and the Lead Order constitutes a "related party transaction" within the meaning of Multilateral Instrument 61- 101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 with respect to the Lead Order contained in sections 5.5(a) and 5.7(1)(a).
The Company will file a material change report in respect of the Lead Order. However, the material change report will be filed less than 21 days prior to the closing of the Lead Order, which is consistent with market practice and the Company deems reasonable in the circumstances.
Early Warning Report Disclosure:
The following disclosure by PROPELR, located at 300-200 Broadview Avenue, Toronto ON M4M 3H3, is made pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.
As noted above, pursuant to the Financing, PROPELR has acquired 4,615,385 Units for $2,400,000.20, consisting of 4,615,385 Common Shares and 2,307,692 Warrants. Immediately before the Financing, PROPELR held, directly or indirectly, beneficial ownership of, or the power to exercise control or direction over, 2,660,000 Common Shares and Warrants convertible into 2,500,000 Common Shares, together with 15,000 stock options to acquire Common Shares held by a joint actor of PROPELR (the "Options"), representing 12.46% of all of the issued and outstanding Common Shares on a non-diluted basis and representing 21.68% of all of the issued and outstanding Common Shares assuming exercise in full of PROPELR's Warrants and the Options.
Immediately after the Financing, PROPELR holds, directly or indirectly, beneficial ownership of, or the power to exercise control or direction over, 7,275,385 Common Shares, Warrants convertible into 4,807,692 Common Shares and Options convertible into 15,000 Common Shares, representing 25.62% of all of the issued and outstanding Common Shares on a non-diluted basis and representing 36.41% of all of the issued and outstanding Common Shares assuming exercise in full of PROPELR's Warrants and the Options.
PROPELR and the Company are party to an investor rights agreement dated January 14, 2022 which granted PROPELR certain rights, including to nominate one of the Company's directors for so long as PROPELR holds, on a non-diluted basis, at least 10% of the issued and outstanding Common Shares of Tribe and to recommend a qualified independent director to the board of Tribe at Tribe's next annual general or special meeting of its shareholders.
PROPELR participated in the Offering in the ordinary course of its business and acquired the Units for investment purposes. In accordance with applicable securities laws and subject to applicable stock exchange requirements, PROPELR or its related entities may from time to time and at any time directly or otherwise, increase or decrease its ownership, control or direction of Common Shares and/or other equity, debt or other securities or instruments of the Company in the open market or otherwise, by privately negotiated agreement, or otherwise. PROPELR's determination may be driven by various factors including without limitation the Company's financial position, the price levels of the Common Shares of the Company, conditions in the securities markets and general economic and industry conditions, the Company's business or financial condition and other factors and conditions PROPELR deems appropriate.
A copy of the Early Warning Report to be filed by PROPELR will be available on SEDAR+ under the Company's profile on www.sedarplus.ca. For more information, or to obtain a copy of the Early Warning Report, please contact PROPELR at info@propelrgrowth.com.
Footnotes:
1The promissory note will be secured against the assets of DMSI and bear interest at a rate of 4.65% per annum on the unpaid principal and will be due and payable quarterly over a 3-year term.
About DMSI Holdings Ltd
DMSI is an Ontario-based property services company delivering industry leading residential and commercial property management services. DMSI is focused on four primary service lines: multi-residential rental property management; building restoration project management; land management; and commercial property management.
About PROPELR Growth
PROPELR Growth is a Toronto-based growth equity investment firm, investing in a wide range of technology and tech-enabled businesses with a focus on Canadian based opportunities. PROPELR supports its portfolio companies by leveraging deep strategic relationships, decades of capital markets expertise, a strong track record of value-added investing, all with a hands-on approach. For additional information, please visit propelrgrowth.com
About Tribe Property Technologies
Tribe is a property technology company that is disrupting the traditional property management industry. As a rapidly growing tech-forward property management company, Tribe's integrated service-technology delivery model serves the needs of a much wider variety of stakeholders than traditional service providers. Tribe seeks to acquire highly accretive targets in the fragmented North American property management industry and transform these businesses through streamlining and digitization of operations. Tribe's platform decreases customer acquisition costs, increases retention, and allows for the addition of value-added products and services through the platform. Visit tribetech.com for more information.
ON BEHALF OF THE BOARD
"Joseph Nakhla" Chief Executive Officer 1606 – 1166 Alberni Street, Vancouver, British Columbia V6E 3Z3
Cautionary Statement on Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian securities laws regarding the Company and its business. When or if used in this news release, the words "anticipate", "believe", "estimate", "expect", "target, "plan", "forecast", "may", "schedule" and similar words or expressions identify forward-looking information. Forward-looking information in this news release may relate to statements with respect to the aims and goals of the Company; the anticipated benefits of the Acquisition; financial projections; growth plans including future prospective consolidation in the property management sector; future acquisitions by the Company; beliefs of the Company with respect to the independent owner-investors market; prospective benefits of the Company's platform; and other factors or information. Such information represent the Company's current views with respect to future events and are necessarily based upon several assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political, and social risks, contingencies, and uncertainties. Many factors, both known and unknown, could cause results, performance, or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking information, including, without limitation, the risk that the benefits of the Acquisition will not be realized as anticipated, or at all. The Company does not intend, and do not assume any obligation, to update forward-looking information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules, and regulations.
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 release.
