TRBE Tribe Property Technolgies Inc

• Tribe has entered into an agreement to acquire (the "Acquisition") Toronto-based DMSI Holdings Ltd ("DMSI"), including its three subsidiaries. DMSI achieved consolidated unaudited revenue of over $12 million in 2023 and positive Net income before taxes of $2.4 million.
• The Acquisition propels Tribe's proforma annualized revenue run-rate to over $31 million and significantly improves the Company's profitability profile. In addition, the Acquisition expands the Company's footprint in residential rental and commercial property management, making Tribe one of the largest rental property management companies in Canada.¹
• To complete the Acquisition, the Company also announces a non-brokered private placement to raise aggregate gross proceeds of up to $3,500,000 which will be led by PROPELR Growth ("PROPELR"), a highly respected, late-stage growth equity investment fund, and will also include the participation of the operators of DMSI.

VANCOUVER, BC, May 27, 2024 /CNW/ - Tribe Property Technologies Inc. (TSXV: TRBE) (OTCQB: TRPTF) ("Tribe" or the "Company"), a leading provider of technology-elevated property management solutions, is pleased to announce that, through its wholly-owned subsidiary Tribe Management Inc. ("Tribe Management"), it is has agreed to acquire DMSI, including three operating subsidiaries of DMSI; DMS Property Management Ltd. ("DMS Property"), Del Management Solutions Inc. ("Del Management"), and Delcom Management Services Inc. ("Delcom").

Joseph Nakhla, CEO of Tribe, commented on the acquisition, "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. We are expecting to have over $31 million in annualized revenue run-rate upon closing of this acquisition, expanding the Company's footprint in residential rental and commercial property management and positioning us as one of the largest property management companies in the country. We are also thrilled that the leadership of these companies will remain intact ensuring continuity and stability."

The Acquisition is a continuation of Tribe's strategy of expanding its residential management business and continuing to expand the Company's national footprint and digital services. The DMSI group of companies brings different areas of expertise to Tribe's growing portfolio - DMS Property specializes in multi-residential rental property management, while Del Management brings in its government contracts and project management services, and lastly, Delcom has a strong domain of commercial management services.

Rob Watt, COO of DMSI, commented, "We couldn't be more thrilled about this exciting new chapter as we join forces with our new partners at Tribe. 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, while leveraging scale and offering even more comprehensive solutions to our valued clients. It's an incredible opportunity to leverage our decades of expertise alongside Tribe's resources, propelling us towards even greater success. In addition, our clients and teams can rest assured that operations and leadership will remain unchanged, maintaining the exceptional service they've come to expect."

Pursuant to a share purchase agreement, dated May 24, 2024, Tribe Management will acquire all of the issued and outstanding shares of DMSI in consideration for $13,000,000 (the "Purchase Price").  The Purchase Price will be satisfied as follows: (i) $10,000,000 in cash paid on closing, subject to adjustment; and (ii) $3,000,000 payable by promissory note.²

The Acquisition is expected to close by the end of May 2024. Tribe anticipates funding the Purchase Price through cash on hand, drawing on the Company's acquisition debt facility and the Financing (as detailed below). Closing remains subject to certain conditions, including receipt of applicable regulatory approvals, and delivery of customary closing documentation. 

DMSI internal consolidated unaudited financial results for the 12-month period ending December 31, 2023, are as follows:

• Revenue of $12,062,500
• Net income before income taxes of $2,411,331
• Total assets of $2,682,072
• Total liabilities of $1,270,987

The vendors and DMSI are at arm's length from Tribe.  No finder's fees are payable in connection with the Acquisition. 

In connection with the Acquisition, the Company will conduct a non-brokered private placement of up to 6,730,770 units of the Company (each, a "Unit") at a price of $0.52 per Unit to raise aggregate gross proceeds of up to $3,500,000 (the "Financing").  Each Unit will consist of one common share of the Company (a "Common Share") and one-half of one Common Share purchase warrant (each whole Common Share purchase warrant, a "Warrant").  Each Warrant will entitle the holder to purchase one Common Share at a price of $0.82 at any time on or before that date which is five years after the closing date of the Financing.  The net proceeds of the Financing will be used by the Company for satisfaction of the Purchase Price.

PROPELR will lead the Financing by subscribing for 4,615,385 Units for aggregate gross proceeds of $2,400,000 (the "Lead Order"). The Financing will also include participation by the operators of DMSI.

Closing of the Financing is subject to certain conditions including, but not limited to, the receipt applicable regulatory approvals, including the approval of the TSX Venture Exchange. All securities issued under the Financing are subject to a hold period expiring four months and one day from the closing date.

PROPELR is a "related party" of the Company and the Lead Order constitutes a "related party transaction" within the meaning of Multilateral Instrument 61- 101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 with respect to the Lead Order contained in sections 5.5(a) and 5.7(1)(a).

The Company will file a material change report in respect of the Lead Order.  However, the material change report will be filed less than 21 days prior to the closing of the Lead Order, which is consistent with market practice and the Company deems reasonable in the circumstances. 

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Footnotes:

¹ Source: https://issuu.com/riccardo11/docs/cpm_spring_2023_whos_who._lr

² The promissory note will be secured against the assets of DMSI and will not bear interest, unless there is an event of default, in which case the promissory note will bear interest at a rate of prime plus 4.65% on the unpaid principal and will be due and payable quarterly over a 3-year term.

DMSI is an Ontario-based property services company delivering industry leading residential and commercial property management services. DMSI is focused on four primary service lines: multi-residential rental property management; building restoration project management; land management; and commercial property management. DMSI is a privately held company owned by Rob Watt and Paul Smith and the Tridel Corporation, one of Canada's leading real estate developers, and a current shareholder of Tribe Property Technologies.

PROPELR Growth is a Toronto-based growth equity investment firm, investing in a wide range of technology and tech-enabled businesses with a focus on Canadian based opportunities. PROPELR supports its portfolio companies by leveraging deep strategic relationships, decades of capital markets expertise, a strong track record of value-added investing, all with a hands-on approach. For additional information, please visit propelrgrowth.com

Tribe is a property technology company that is disrupting the traditional property management industry. As a rapidly growing tech-forward property management company, Tribe's integrated service-technology delivery model serves the needs of a much wider variety of stakeholders than traditional service providers. Tribe seeks to acquire highly accretive targets in the fragmented North American property management industry and transform these businesses through streamlining and digitization of operations. Tribe's platform decreases customer acquisition costs, increases retention, and allows for the addition of value-added products and services through the platform. Visit tribetech.com for more information.

ON BEHALF OF THE BOARD

"Joseph Nakhla"
Chief Executive Officer
1606 – 1166 Alberni Street, Vancouver, British Columbia
V6E 3Z3
Phone: (604) 343-2601
Email: joseph.nakhla@tribetech.com

Cautionary Statement on Forward-Looking Information

This news release contains forward-looking information within the meaning of applicable Canadian securities laws regarding the Company and its business.  When or if used in this news release, the words "anticipate", "believe", "estimate", "expect", "target, "plan", "forecast", "may", "schedule" and similar words or expressions identify forward-looking information. Forward-looking information in this news release may relate to statements with respect to the aims and goals of the Company; closing of the Acquisition and the Financing; the Lead Order; financial projections; growth plans including future prospective consolidation in the property management sector; future acquisitions by the Company; beliefs of the Company with respect to the independent owner-investors market; prospective benefits of the Company's platform; and other factors or information. Such information represent the Company's current views with respect to future events and are necessarily based upon several assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political, and social risks, contingencies, and uncertainties. Many factors, both known and unknown, could cause results, performance, or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking information. The Company does not intend, and do not assume any obligation, to update forward-looking information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules, and regulations.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Tribe Property Technologies Inc.