Tribe Property Technologies Inc. (TSX-V:TRBE) announced an agreement to acquire Toronto-based property services company DMSI Holdings Ltd (DMSI) for $13 million.
This acquisition is expected to significantly boost Tribe's revenue and expand its presence in residential rental and commercial property management.
With the acquisition, Tribe's proforma annualized revenue run rate is projected to surpass $31 million, enhancing the company's profitability and positioning it as one of the largest rental property management companies in Canada.
In 2023, DMSI reported consolidated unaudited revenue exceeding $12 million and a net income before taxes of $2.4 million.
To finance the acquisition, Tribe is initiating a non-brokered private placement aiming to raise up to $3.5 million. This funding round will be led by PROPELR Growth, a respected late-stage growth equity investment fund, with participation from the operators of DMSI.
Joseph Nakhla, CEO of Tribe, highlighted the strategic value and growth potential that the acquisition brings to Vancouver-based Tribe.
"We are excited to announce the acquisition of three remarkable companies, each contributing a unique and distinct portfolio to our rental management division. With profitable and robust recurring business, the synergies created by these additions will undoubtedly elevate our presence in rental management and set up Tribe for significant growth and innovation.”
Nakhla added that the leadership of the acquired companies would remain intact, ensuring continuity and stability.
DMSI specializes in multi-residential rental property management, building restoration project management, land management, and commercial property management. The company's ownership includes Rob Watt, Paul Smith, and the Tridel Corporation, a prominent Canadian real estate developer and existing shareholder of Tribe Property Technologies.
Rob Watt, COO of DMSI, commented on the acquisition: "This strategic move aligns perfectly with our vision of innovative, excellent service to landlords and tenants, enabling us to expand our unique service offering across Canada. It's an incredible opportunity to leverage our decades of expertise alongside Tribe's resources, propelling us towards even greater success."
The transaction details include Tribe Management acquiring all issued and outstanding shares of DMSI for $13 million, consisting of $10 million in cash and $3 million payable by promissory note. The acquisition is expected to close by the end of May 2024, pending regulatory approvals and customary closing conditions.
The private placement will offer up to 6,730,770 units of the company at $0.52 per unit, each consisting of one common share and one-half of a common share purchase warrant.
PROPELR Growth will lead the financing with a $2.4 million commitment, ensuring substantial support for the acquisition's financial requirements.