Wellnex Life Limited (ASX:WNX) entered into a binding agreement to acquire the business and assets of Pain Away from 365 Health Australia Pty Limited, Ziptime Pty Limited, One Zero Pty Limited, Twisobell Health Pty Limited for AUD 22 million on May 25, 2023. Wellnex Life will pay in cash which will comprise a deposit of AUD 2.2 million, payable upon execution of the Sale Agreement (Deposit), with the balance of the purchase price payable at completion, which is subject to customary adjustments. In order to fund the purchase price of AUD 22 million (comprising an up-front deposit with the balance to be paid at completion) and associated transaction fees, intends to raise funds by way of equity financing. The equity financing will comprise an initial placement of fully paid ordinary shares (Shares) to raise AUD 2.2 million in Initial Placement; a non-renounceable pro-rata 1-for-4 entitlement offer to raise up to AUD 5.3 million in Entitlement Offer; and a second placement of 400 million shares to raise AUD 20 million. Pain Away generated revenue of AUD 12.4 million during the financial year ended June 30, 2022. Completion of the Proposed Transaction is not subject to a financing condition precedent, and accordingly there is a risk that the Proposed Transaction will not proceed and the Sale Agreement will be terminated if Wellnex Life is unable to successfully complete its capital raising (outlined below). The transaction is subject to obtaining all necessary ASX approvals (including shareholder approval) satisfaction of certain customary conditions and Manufacturing Agreement Condition and expected to complete by no later than July 31, 2023. As on August 1, 2023, the deadline of the completion has been extended to August 14, 2023. As on September 1, 2023, the deadline of completion has been further extended to September 30, 2023 for negotiating revised terms. As of September 18, 2023, Wellnex has agreed to new terms for the acquisition with the completion payment reduced from AUD 19.8 million to AUD 13.95 million. The parties have agreed to a deferred consideration of AUD 5.85 million payable in equal instalments on the 12 month and 18 months anniversary of the acquisition date, which will be paid from the internal cash generation of the combined business. Wellnex in consideration of the deferred payment will issue 20 million fully paid ordinary shares at AUD 0.05 escrowed until May 2024. The new transaction structure is anticipated to close by September 22, 2023 with a sunset date of October 16, 2023.
Salter Brothers Capital acted as lead adviser, Holding Redlich acted as legal adviser and RSM as financial adviser to Wellnex Life. Barclay Pearce Capital Pty Limited has been engaged to lead the capital raise for Wellnex. As of November 3, 2023, Wellnex Life Limited and vendors have agreed to further extend the sunset date to December 8, 2023.

Wellnex Life Limited (ASX:WNX) completed the acquisition of business and assets of Pain Away from 365 Health Australia Pty Limited, Ziptime Pty Limited, One Zero Pty Limited, Twisobell Health Pty Limited on December 18, 2023.