GRAND RAPIDS, Mich., Feb. 05, 2018 (GLOBE NEWSWIRE) -- Agility Health, Inc. (TSXV:AHI) (“Agility Health” or the “Company”) announced today that it has signed a definitive agreement (the “Purchase Agreement”) to sell 100% of its U.S.-based assets (the “Transaction”) to Alliance Physical Therapy Management, LLC (“Alliance”), a wholly-owned subsidiary of Alliance Physical Therapy Partners, LLC, which is a portfolio company of GPB Capital Holdings, LLC (“GPB”). The transaction, which values the U.S. operations at USD$45 million (the “Purchase Price”), is expected to close in February 2018. Pursuant to the terms of the Purchase Agreement, the Company’s subsidiary, Agility Health Holdings, Inc. (“Agility Health Holdings”), and Alaris USA, Inc. (“Alaris”) will sell their respective membership interests in Agility Health, LLC (“Agility LLC”), the owner of the Company’s U.S. based assets, to Alliance.
Approximately USD$25,095,488 of the Purchase Price will be paid to Alaris in accordance with the terms of the Second Amended and Restated Limited Liability Agreement of Agility LLC between Alaris and Agility Health Holdings, Inc. which represents the purchase price for Alaris’ Class B and C units in Agility LLC as well as the amount of distributions that are owed by Agility LLC in respect of the Alaris units. Agility Health Holdings will receive USD$19,904,512 (the “Agility Payment”) which represents the portion of the Purchase Price that it will receive for its Class A Units in Agility LLC. At the closing of the Transaction, the following amounts will be deducted from the Agility Payment: (i) USD$300,000 to be held in escrow for approximately 120 days until certain post-closing adjustments to the Purchase Price have been accounted for; (ii) USD$500,000 to be held in escrow for 18 months in order to secure Agility’s indemnity obligations under the Purchase Agreement; (iii) approximately USD$13,425,618 which will be used to repay financial obligations of Agility LLC and its subsidiaries as well as certain indebtedness of Agility Health outstanding at the closing of the Transaction including, without limitation, the repayment of the Company’s outstanding convertible debentures; (iv) approximately USD$3,630,750 which will be used to pay the amounts owing by the Company to R.C. Morris & Company Special Opportunities Fund III LP pursuant to a loan agreement dated May 1, 2017; and (v) approximately USD$760,000 which represents Agility’s expenses for the Transaction and includes a payment of USD$500,000 to Agility Health’s financial advisor, Livingstone Partners, LLC. In addition, certain amounts will either be added or deducted from the Agility Payment based on the amount of cash and working capital of Agility LLC at the closing of the Transaction. After the closing of the Transaction and the payments set out above, it is estimated that the Company will retain approximately USD$1,300,000. The Company intends to use the remaining available funds for general working capital purposes and to provide capital to grow Medic Holdings Corp. (“Medic”), the Company’s Canadian subsidiary that will constitute the primary business and asset of the Company post-transaction. Medic currently operates twelve outpatient foot care clinics across two provinces in Eastern Canada and manufactures orthotics and prosthetics. Under the terms of the of the Purchase Agreement, Agility Health will not be able to engage in a business in the United States that is competitive with Agility LLC’s business for a period of five years.
“Selling Agility Health’s U.S. operations facilitates the restructuring of our capital structure in order to strengthen the Company’s financial position for sustained future growth,” stated Pierre G. Gagnon, Agility Health’s Chairman and Interim Chief Executive Officer.
The Transaction constitutes an arm's length reviewable transaction under TSX Venture Exchange (“TSXV”) Corporate Finance Manual Policy 5.3 - Acquisitions and Dispositions of Non-Cash Assets and is subject to the approval of the TSXV. In addition, completion of the Transaction will be subject to the satisfaction or waiver of customary terms and conditions for a transaction of this nature, including receipt of all required consents and regulatory approvals including the approval of a majority of the Company’s shareholders.
About Agility Health
In Canada, Medic Holdings Corp., Agility Health's Canadian subsidiary, operates twelve foot care clinics and manufactures orthotics and prosthetics.
Through its U.S. subsidiary and principal operating entity, Agility Health, LLC, Agility Health operates a multi-state network of outpatient rehabilitation clinics and provides contracted services to hospitals, nursing homes and other institutional clients, providing care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers, and a variety of other injuries and conditions. In addition, Agility Health provides a number of ancillary services related to physical rehabilitation, including practice management software systems and custom orthotics. As of December 31, 2017, Agility Health operates 84 outpatient or onsite rehabilitation locations in 16 states. Agility Health's contract therapy services business provides rehabilitative services to 36 hospitals and inpatient rehabilitation units and 37 nursing homes, long-term care facilities and other service locations in 11 states.
For more information, please visit www.agilityhealth.com.
This press release contains forward-looking statements regarding Agility Health and its business. Such statements are based on the current expectations and views of future events of Agility Health’s management. In some cases the forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “plan”, “anticipate”, “intend”, “potential”, “estimate”, “believe” or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The forward-looking events and circumstances discussed in this release, including the expected amount of the Agility Payment and the deductions therefrom, the amount of funds available to Agility Health on any completion of the Transaction, the expected or intended use of any such funds and the future growth of Agility Health’s Canadian business, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Agility Health undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future events, or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information, please contact:
Vice President, Corporate Development
Ray Matthews and Associates