14:19:41 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Patient Home Monitoring Corp
Symbol PHM
Shares Issued 204,282,153
Close 2015-01-27 C$ 1.04
Market Cap C$ 212,453,439
Recent Sedar Documents

Patient Home identifies acquisition target BB Medical

2015-01-28 09:05 ET - News Release

Mr. Michael Dalsin reports

PATIENT HOME MONITORING (PHM) EXECUTES FINAL PURCHASE AGREEMENT FOR ACQUISITION OF BLACK BEAR MEDICAL, A PROFITABLE $8.5 MILLION ANNUAL REVENUE BUSINESS

Patient Home Monitoring Corp. has executed a binding purchase agreement for the acquisition of Black Bear Medical (BB Medical), a profitable, Maine-based company focused on providing home-based health care services, including mobility solutions, through several retail locations in Maine and New Hampshire. The acquisition is expected to have an immediate and positive impact on earnings per share and is expected to increase total run-rate revenues of PHM to over $48-million annually, not including organic growth postclosing. Closing is subject to TSX Venture Exchange approval for issuance of shares to the sellers.

Acquisition

When Black Bear Medical's unaudited trailing-12-month figures are combined with PHM's annualized reported first quarter of 2015, PHM is expected to generate:

  • Over $48.5-million in annual run-rate revenue;
  • Over $10.5-million in annual run-rate adjusted EBITDA (earnings before interest, taxes, depreciation and amortization);
  • Significant new organic growth cross-selling opportunities designed to generate additional revenue and profit growth.

For over 20 years, the acquisition target company has served tens of thousands of patients in the states of Maine and New Hampshire. PHM expects to generate postacquisition organic growth from four strategies: (1) the acquisition is slated to give PHM additional locations and access to thousands of active patients with multiple chronic illnesses, resulting in cross-selling opportunities with PHM's existing cardiology services, pulmonology services and drug distribution services; (2) PHM plans to cross-sell custom mobility services and products to its existing patients; (3) PHM plans to expand this compelling retail concept to existing PHM locations in much larger markets throughout South Carolina, California, Georgia and Florida; and (4) by acquiring patients in the 40-to-65-year age group through the retail stores, PHM also gains a clear advantage in keeping and serving the needs of these patients as chronic conditions emerge later in life.

Black Bear Medical generated more than $8.5-million in revenue for the 2014 calendar year with just over $1-million in adjusted EBITDA over the same period, based upon unaudited due diligence.

Under the terms of the definitive purchase agreement, PHM will acquire 100 per cent of the stock of the Black Bear Medical entities for a total consideration of (1) $622,680 in cash to the sellers and (2) 7,072,472 shares of PHM issued to the sellers, subject to TSX approval. The letter of intent was executed based on a term sheet offered when PHM's stock price was 57 cents.

"There is an immediate and positive impact on our financial statements with this acquisition," said Michael Dalsin, chairman of PHM. "While the acquisition will only be reflected in PHM's financial statements for the last two months of the current quarter, I expect there to be a significant impact on this quarter's financial results, with the full force of revenue and profits being recorded in this year's fiscal third quarter.

"Black Bear Medical offers PHM access to a new market, the Northeast U.S.," continued Mr. Dalsin. "This acquisition provides two interesting service lines that can be offered to our existing patient database -- custom mobility and brick-and-mortar retail locations. PHM plans to expand this retail concept to the Southeast U.S. At the same time, this acquisition provides significant expansion opportunities for both of our pulmonology and cardiology service business units in the Maine and New Hampshire markets. David Hayes and the executive team plan to efficiently integrate the business into PHM, and are focused on generating organic and cross-selling revenue immediately within the existing growing patient database.

"We do expect to close our LOI of a small pulmonology company in Georgia shortly as well. Our M&A [mergers and acquisitions] team is nearing the LOI stage with at least two additional acquisition targets, and I expect to have the next deal lined up shortly," Mr. Dalsin concluded.

We seek Safe Harbor.

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