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MALVERN, Pa. and TORONTO - Neuronetics , Inc. (NASDAQ: NASDAQ:STIM), a leader in the mental health sector, has agreed to acquire Greenbrook TMS Inc. (OTCMKTS: GBNHF) through an all-stock transaction. The definitive arrangement will see Neuronetics taking over all outstanding common shares of Greenbrook, combining two prominent companies in the U.S. mental health space.
Keith Sullivan, President and CEO of Neuronetics, highlighted the strategic benefits of the acquisition, emphasizing the potential for increased NeuroStar brand awareness, consistent delivery of best practices, and improved reimbursement processes.
The transaction is structured to result in Neuronetics shareholders owning approximately 57% and Greenbrook shareholders owning approximately 43% of the combined company on a fully diluted basis.
The leadership team of the merged company will include key members from both Neuronetics and Greenbrook, with Bill Leonard, Greenbrook's current President and CEO, among those joining the executive team.
The transaction is the outcome of a strategic review process by Greenbrook, overseen by an independent directors' committee. Greenbrook and Neuronetics will provide further details in a joint proxy statement to their respective stockholders ahead of the shareholder meetings.
InvestingPro Insights
In the wake of the announced acquisition of Greenbrook TMS Inc. (OTCMKTS: GBNHF) by Neuronetics, Inc. (NASDAQ: STIM), a closer look at Greenbrook's financial health and market performance provides additional context for investors. According to InvestingPro data, Greenbrook operates with a market capitalization of approximately $1.67 million, reflecting a relatively small player within the industry. The company's revenue for the last twelve months as of Q1 2024 stood at $72.49 million, yet it experienced a decline in revenue growth of 0.78% during the same period. This underlines the challenges Greenbrook has faced in expanding its top-line figures.
Further emphasizing the financial hurdles, Greenbrook's gross profit margin was a mere 0.51%, indicating struggles in maintaining profitability on its core operations. The company's stock price has also seen considerable volatility, with a significant drop of over 39% in the past week alone. This level of price fluctuation could be a point of concern for potential investors looking for stability in their investments.
InvestingPro Tips highlight two particularly relevant points for those interested in the transaction's implications: Greenbrook currently operates with a significant debt burden and is quickly burning through cash. These factors, combined with the lack of profitability over the last twelve months and the analysts' expectation that the company will not be profitable this year, suggest that the strategic benefits touted by Neuronetics will need to be substantial to offset these existing financial challenges.
For investors seeking a deeper dive into the financial metrics and future projections of Greenbrook TMS Inc., InvestingPro offers an extensive range of additional tips—17 in total, available at https://www.investing.com/pro/GBNHF. These insights could prove invaluable in assessing the potential risks and rewards of the acquisition as it progresses towards completion.
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