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Toronto-based healthcare software company Think Research has signed a definitive agreement to itself be acquired by its lender, Beedie Capital.

Beedie has agreed to buy all the common shares of Think Research, excluding the shares that Beedie already owns, and shares owned by certain directors, executive officers, and shareholders. for $0.32 CAD apiece. The all-cash deal is expected to close in the second quarter of 2024.

Richard Wells, a director on Think Research’s board, described the impending acquisition as “the best available path forward” for the company.

Think Research executive vice president Mark Sakamoto told BetaKit that the value of the deal is anticipated to be $85 million CAD.

Think Research said the transaction represents a 100 percent premium to its closing price on the TSX Venture Exchange (TSXV) yesterday. The company expects the deal to benefit shareholders given the “limited trading volume, the financial challenges facing [Think Research]and the lack of liquidity in the shares.”

In a statement, Think Research CEO Sachin Aggarwal said the deal “eliminates the financial and administrative burden of continuing as a reporting issuer in what is already a challenging market environment.” Richard Wells, a director on Think Research’s board, described the impending acquisition as “the best available path forward” for the company.

Founded in 2006, Think Research is a healthcare software firm that develops and buys tools and content for clinicians. The company has traded on the TSXV under the symbol ‘THNK’ since 2020, after completing a reverse takeover of shell company AIM4 Ventures Inc.

Think Research has been highly acquisitive since that time. The company’s acquisitions since 2021 include Clinic 360, MDBriefCase, BioPharma Services, and Pharmapod.

Think Research has also secured several credit facilities since its TSXV debut. The company had a $25-million credit arrangement with the National Bank of Canada, but in 2021 replaced that with a $28-million credit facility with the Bank of Nova Scotia. 

In 2022, the company raised an additional $25-million credit facility with Beedie to pursue more acquisitions, and last year received a new $1.5 million non-convertible loan from Beedie for general and working capital purposes.

Since its peak of $4.66 in 2020, Think Research’s stock has lost the majority of its value, and is trading at 30 cents as of press time.

According to Think Research’s most recently published financial results, the company had $114 million in assets and $86 million in liabilities as of September 30, 2023. The company reported a net loss of $9.7 million for the nine months ended September 30, 2023 and approximately $3.7 million in cash and $27.7 million in current long-term debt as of September 30, 2023.

According to its management discussion and analysis for the same fiscal period, Think said it determined that it was not in compliance with minimum liquidity, minimum earnings before interest, taxes, depreciation, and amortization, and the secured-debt-to-gross-profit covenants as set out in its credit facilities, noting it was “discussing how to address this” with its lenders at the time.

An analyst note from Desjardins Friday stated that due to Think Research’s “high leverage” and breach of debt covenants, Beedie likely had “significant leverage” in the deal negotiations. 

“We believe THNK has an attractive set of assets, but being part of a larger group should make it easier for the company to manage its debt and diverse set of operations,” the note read, adding that “the alleviation of the financial management burden should help management execute on its plan.”