Deal Teardown: How Custom Health Structured a CAD $22.0M Dual-Track M&A Financing with Stifel Canada and 60-Month Warrants

On November 11, 2026, Toronto Stock Exchange-listed digital health and medication management operator Custom Health Holdings Inc. (TSX: CHLT) launched a CAD $22.00 million equity financing package priced at C$4.95 per unit to fund accretive healthcare acquisitions and balance-sheet debt repayment.

For non-resource growth companies on the TSX and TSX Venture Exchange executing programmatic roll-up strategies, Custom Health’s transaction offers a compelling structural blueprint: combining an underwritten/agency Overnight Marketed Public Offering (CAD $12.00M, sole-led by Stifel Nicolaus Canada Inc.) with a concurrent Non-Brokered Private Placement (CAD $10.00M PIPE) on identical terms, while using an extended 60-month (5-year) warrant tenor (C$5.90 strike) to clear institutional demand at a tight pricing band.

Executive Deal Summary: Dual-Track Public + PIPE Architecture

Rather than routing the entire CAD $22.00M capital raise through a single prospectus syndicate—or relying solely on a four-month hold private placement—Custom Health split the book into two synchronized sleeves priced identically at C$4.95 per unit:

Structural Deep-Dive: Why Pair an Overnight Marketed Offering with a Concurrent PIPE?

In Canadian small- and mid-cap healthcare, technology, and industrial roll-ups, issuers frequently face a structural mismatch between two distinct investor constituencies:

1. Public Crossover & Institutional Funds: Require immediately freely tradable shares issued via a short-form prospectus supplement and validated by a tier-1 healthcare investment bank (Stifel Nicolaus Canada Inc.).
2. Existing Insiders, Family Offices & Strategic Relationship Buyers: Are willing to hold shares through a standard four-month statutory lock-up and do not require an investment bank intermediary to validate the thesis.

1. Compressing Blended Syndicate Fee Drag by 45.5%

As documented in our 2026 Small-Cap Syndicate Compensation & Dealer Fee Study, a standard 6.0% agency commission across a full CAD $22.00M brokered offering would cost the issuer CAD $1.32 million in cash fees plus 266,670 broker warrants.

By carving out CAD $10.00 million (45.5% of the raise) into a concurrent non-brokered private placement for relationship and strategic buyers while giving Stifel Canada sole bookrunner economics on the CAD $12.00 million (54.5%) overnight marketed public sleeve (plus a 15% over-allotment option for an additional CAD $1.80M), Custom Health reduced its effective blended cash commission across the $22.0M raise from 6.00% to an estimated ~3.27%—retaining hundreds of thousands of dollars in additional net treasury capital for debt retirement.

Warrant Engineering: The 60-Month Tenor Trade-Off

A second defining feature of Custom Health’s offering is its warrant structure: each C$4.95 unit includes one full common share purchase warrant exercisable at C$5.90 per share for a period of 60 months (5.0 years).

Comparing these parameters against our 2026 Micro-Cap & Small-Cap Warrant Pricing Benchmarks highlights a deliberate corporate finance trade-off:

• Duration Extension (60 Months vs. 24-Month Market Median): Across all Canadian unit financings in 2026 YTD, 62.9% of warrants carry a 24-month expiry, while fewer than 8.5% extend to 60 months. Extending warrant duration to five years dramatically increases the Black-Scholes option value handed to institutional subscribers, allowing Stifel and management to clear a $22.0M healthcare M&A book overnight without resorting to a punitive 25%–30% share price discount.
• Tight Strike Premium (+19.2% vs. +42.9% Market Median): Priced at a C$5.90 strike over the C$4.95 unit price (+19.2% premium), the 4,444,502 base warrants act as a structured CAD $26.22 million shadow equity pipeline (up to CAD $28.37M if the over-allotment option is exercised in full). As Custom Health integrates its targeted pharmacy and digital health acquisitions and deleverages its balance sheet, a modest 20%+ equity re-rating puts the entire warrant tranche in the money—providing a secondary wave of non-brokered cash inflows to fund subsequent M&A tranches through 2031.

Key Takeaways for TSX & TSXV Growth Roll-Ups

For non-resource issuers—including healthcare platforms, SaaS consolidators, and companies scaling after a TSXV Capital Pool Company (CPC) Qualifying Transaction—Custom Health’s CAD $22.0M financing illustrates three actionable principles:

1. Split Public Bookbuilding from Relationship PIPE Allocations: Always pair your underwritten or overnight marketed prospectus offering with a concurrent non-brokered PIPE sleeve when insiders, family offices, or existing institutional holders are committing capital. You gain tier-1 institutional research and distribution (Stifel) on the public float while eliminating syndicate fees on the relationship tranche.
2. Use 60-Month Warrant Duration to Protect Issue Price: When raising M&A and deleveraging capital in a selective healthcare tape, institutional funds will demand either a steep upfront price discount or long-dated convexity. Granting a 60-month warrant tenor preserves your headline share price (C$4.95) and reduces immediate primary share dilution.
3. Pair M&A Accretion with Balance-Sheet Deleveraging: Allocating proceeds simultaneously to accretive acquisitions and debt repayment creates a dual catalyst for equity re-rating—expanding EBITDA while reducing interest expense and net leverage multiples.