Public to Private: Carebook Follows Trend Among Canadian Tech Firms

Montréal-based healthtech company Carebook Technologies is set to return to private ownership just over four years after its initial public offering. The move comes as the company struggles to navigate persistent financial difficulties and the challenges of maintaining a presence in the public markets. Carebook’s majority shareholder, UIL Limited, has taken the lead in facilitating this transition by agreeing to acquire all outstanding shares of Carebook that UIL and its affiliates do not currently own. Under the agreement, shareholders will receive $0.10 CAD per share in cash, a price that represents a significant 122 percent premium compared to the closing price of Carebook’s stock on January 2, 2025, the day before the deal was announced.

Since its listing on the TSX Venture Exchange (TSXV) in October 2020, Carebook has faced mounting challenges, including difficulty securing investor confidence and ongoing financial losses. While the company pursued growth through acquisitions, including the $23 million CAD combined purchase of Kelowna’s CoreHealth Technologies and Winnipeg-based InfoTech in 2021, these efforts failed to translate into a sustainable financial turnaround. Over time, Carebook’s stock price plummeted by over 95 percent from its peak value of $2.04 CAD per share to less than $0.05 CAD before the privatization announcement. The company’s market capitalization has since dwindled to approximately $7 million, a fraction of its earlier valuation.

The leadership team at Carebook, its board of directors, and a special committee tasked with evaluating strategic alternatives have all endorsed the privatization plan. Additionally, MedTech Investment LP, Carebook’s second-largest shareholder, has voiced its support for the move. CEO Michael Peters has emphasized that the agreement represents a “positive outcome” for the company and its shareholders, underscoring the immediate liquidity and significant cash premium it provides. Peters noted that transitioning to private ownership will allow Carebook to focus on its long-term strategic vision without the financial and administrative burdens associated with being a publicly traded company, especially amid unfavorable market conditions for smaller-cap healthtech firms.

Beyond addressing immediate financial pressures, the privatization also reflects a broader strategy to streamline operations and refocus resources on the company’s core mission. As a private entity, Carebook will gain greater operational flexibility and the ability to navigate the evolving healthcare technology landscape with fewer external constraints. This shift will also alleviate the reporting and regulatory requirements that come with being listed on the TSXV, allowing the company to dedicate more attention to innovation and growth.

The transaction is still pending court approval and will need to meet customary closing conditions, but it is projected to be finalized by the first quarter of 2025. Once completed, Carebook’s shares will be delisted from the TSX Venture Exchange (TSXV), marking a pivotal moment in the company’s journey. By transitioning away from the public markets, Carebook aims to regain control over its operations and strategy, free from the pressures of quarterly financial reporting and the volatility of public market valuations. This move is designed to provide the company with the agility to refocus on its core business and strategic initiatives, while also allowing it to restructure and stabilize its operations in a more flexible environment. Ultimately, the company’s leadership hopes that this shift will position Carebook to rebuild momentum and set a foundation for long-term success within the competitive healthtech industry. The privatization also presents an opportunity for the company to allocate more resources to its product development and innovation, with a clearer path to growing and scaling in the evolving healthcare technology market.