Carebook joins parade of public Canadian tech companies returning private

Just over four years after going public, struggling Montréal healthtech firm Carebook Technologies has struck a deal with its largest shareholder to become private once more.

Last week, majority shareholder UIL Limited agreed to acquire all common Carebook shares that UIL or its affiliates and associates do not already own for $0.10 CAD apiece in cash. This marks a 122 percent premium relative to the closing price of Carebook’s shares on the TSX Venture Exchange (TSXV) on Jan. 2, the day before the agreement was announced.

Reprivatizing alleviates Carebook from the “financial and administrative burden of remaining a reporting issuer in … a challenging capital markets environment.”

Since debuting on the TSXV, Carebook has grown its business through acquisitions but continued to lose money and faced difficulty winning over public market investors. The company’s stock price has fallen by more than 95 percent from its high of $2.04 in Oct. 2020 to less than $0.05 prior to this deal, and Carebook currently boasts a market capitalization of approximately $7 million—a fraction of the $23 million combined it paid to acquire Kelowna’s CoreHealth Technologies and Winnipeg-based InfoTech back in 2021.

Carebook’s leadership team, board of directors, special committee, and second largest shareholder MedTech Investment LP have agreed to support the move. The transaction, which remains subject to court approval and customary closing conditions, is expected to close in Q1 2025, after which Carebook’s common shares will be delisted from the TSXV.

In a statement, Carebook CEO Michael Peters characterized the agreement as “a positive outcome” for the business, noting that it comes at a significant cash premium and delivers immediate liquidity to Carebook’s shareholders.

“As a private company, Carebook will have the flexibility and resources to continue to implement its strategic vision without the added financial and administrative burden of remaining a reporting issuer in what remains a challenging capital markets environment,” Peters added.

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Carebook sells digital health products to businesses, employers, pharmacies, and insurance providers. The healthtech firm went public on the TSXV in late 2020 via reverse takeover amid a pandemic boom in new tech listings. Peters replaced Pascale Audette as CEO a year later.

Now, Carebook is set to join the wave of Canadian tech companies that went public during that mid-2020 to late 2021 period and have since opted to return to private markets. This group includes CloudMD, Copperleaf Technologies, MDF Commerce, Nuvei, Q4 Inc., and TrueContext, and has expanded in recent weeks with the addition of Payfare and Softchoice.

BetaKit recently reported on this public market exodus, which marked one of the Canadian technology sector’s biggest stories of 2024. As experts have told BetaKit, going private is cheaper and comes with less scrutiny for companies when they cannot put together the results necessary to satisfy public market investors.

Feature image courtesy Unsplash. Photo by National Cancer Institute.