BioSyent to acquire Oral Science for $25.5-million

Executive Summary

• BioSyent Inc. has entered into a share purchase agreement to acquire 100% of Oral Science Inc., a Canadian distributor of specialized dental hygiene and oral health products, for a total consideration of $25.5 million.
• The transaction is expected to close before the end of February 2026, subject to customary conditions, and is anticipated to be accretive to earnings and cash flows in 2026.
• BioSyent will finance the cash portion of the deal using existing liquidity and a new $6.0 million senior secured demand term loan from RBC Royal Bank, while retaining a strong net cash position post-closing.

Key Details

• Transaction Structure: BioSyent acquires 100% of issued and outstanding shares of Oral Science Inc.
• Total Consideration: $25.5 million, consisting of:
  • $22.5 million in cash.
  • 234,192 BioSyent common shares valued at $12.81 per share (aggregate value of $3.0 million).
• Share Vesting/Escrow:
  • A portion of the consideration shares is subject to a two-year escrow.
  • The balance is subject to a two-year lock-up, with 25% of the locked-up shares released every six months.
• Working Capital: The purchase price is inclusive of a $6.3 million net working capital requirement on closing.
• Contingent Consideration:
  • Sellers are entitled to a contingent cash earnout payment in 2027 based on Oral Science's performance in 2025 and 2026.
  • Contingent royalty payments until 2033 based on future sales of one product, up to a maximum value of $6.0 million.
• Closing Conditions: Subject to customary closing conditions, agreements, consents, and regulatory approvals. Expected to close before the end of February 2026.
• Financing:
  • $16.5 million from BioSyent’s liquid cash on hand.
  • $6.0 million one-year senior secured demand term loan with RBC Royal Bank.
  • BioSyent expects to fully repay the term loan by Q4 2026.
  • BioSyent secured a senior secured demand revolving credit line facility of up to $12.0 million with RBC for future working capital needs (combined facilities not to exceed $12.0 million).
  • Net cash and investments expected to be in excess of $10 million on closing.
• Target Financials (Oral Science Inc.):
  • Trailing 12 months ended Sept. 30, 2025: Gross revenues in excess of $30.0 million.
  • Trailing 12 months ended Sept. 30, 2025: EBITDA in excess of $4.0 million.
  • Compound annual revenue growth rate in excess of 15% since 2018.
  • Revenue split: 54% from sales to dental clinics; 46% from consumer purchases at retail pharmacies or online.
• Pro Forma Financials (Combined BioSyent + Oral Science):
  • Pro forma revenues for TTM ended Sept. 30, 2025: In excess of $70 million.
  • Pro forma EBITDA for TTM ended Sept. 30, 2025: In excess of $15.75 million.
• Valuation Multiple: The $25.5 million purchase price implies a purchase multiple of 6.33 times EBITDA for the TTM ended Sept. 30, 2025, before contingent consideration.
• Advisers:
  • Legal Counsel: Wildeboer Dellelce LLP (for BioSyent).
  • Financial Adviser: KPMG LLP (for BioSyent).
• No Finders' Fees: Applicable in respect of this transaction.

Notable Quotes

• Rene Goehrum, President and CEO of BioSyent: "We are excited to announce our acquisition of Oral Science, which provides BioSyent with a new platform for portfolio expansion and revenue and profit growth... BioSyent's acquisition of Oral Science helps us deliver on our strategic priorities of continued profitable growth, portfolio diversification and long-term value creation for our stakeholders."
• Daniel Menard, President of Oral Science: "This important milestone ensures the long-term sustainability of Oral Science and positions the company to successfully navigate an ever evolving dental industry... This transaction represents a significant opportunity for Oral Science's employees and collaborators to be part of BioSyent, a successful Canadian public company."