Revised Investment Terms for Choice Drug Systems, Inc. and Counsel Corporation

Strategic Insights -

Choice Drug Systems, Inc. and Counsel Corporation of Toronto, Canada have revised the terms of an investment deal, with Counsel agreeing to purchase 2 million shares of Choice Drug common stock at $3.40 per share rather than the previously announced $3.21 per share. The Boards of Directors of both companies have unanimously approved the revised terms, which include an increased price for the 2 million warrants exercisable over five years. This transaction is set to close following yesterday's stock price of $4 7/16 on the Nasdaq National Market.

Key Takeaways:

  • Counsel Corporation will purchase 2 million shares of Choice Drug common stock at $3.40 per share.
  • The price per share for 2 million warrants exercisable over five years will be the greater of $4.50 or the closing price of Choice Drug common stock on the trading day immediately preceding the closing of the transaction.
  • The Boards of Directors of both Choice Drug Systems, Inc. and Counsel Corporation have unanimously approved the revised terms of the investment.
  • The transaction has been impacted by the closing price of Choice Drug common stock, which was $4 7/16 on the Nasdaq National Market yesterday.
  • Counsels' 70%-owned home health care business, American HomePatient, is the fourth-largest diversified provider of home care services in the United States.
  • Choice Drug Systems, Inc. and its wholly-owned subsidiaries provide a range of services, including pharmaceuticals, durable medical equipment, and Medicare B reimbursable products and services to various healthcare and correctional institutions.

Statistics:

  • 2 million shares of Choice Drug common stock will be purchased by Counsel Corporation at $3.40 per share.
  • The price per share for 2 million warrants exercisable over five years will be determined by the greater of $4.50 or the closing stock price.
  • The price of Choice Drug common stock closed at $4 7/16 on the Nasdaq National Market yesterday.
  • American HomePatient is the fourth-largest diversified provider of home care services in the United States.
  • Choice Drug services accounts for the company operate throughout the United States.

Sources:

  • Business Wire, "Choice Drug Systems, Inc. and Counsel Corporation of Toronto, Canada Announce Revised Terms of Investment," November 4, 1994.