TARGET HAS C$4 MILLION IN ANNUALIZED REVENUES, ADDITIONAL SERVICE OFFERINGS AND A LARGE PATIENT DATABASE
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.
CINCINNATI, April 17, 2019 (GLOBE NEWSWIRE) -- Protech Home Medical Corp. (“Protech” or the “Company”) (TSXV: PTQ), a healthcare services company with operations in the United States, is pleased to announce that it has executed a non-binding letter of intent (LOI) to acquire a private company in the Northeastern United States. reporting unaudited trailing 12 month annual revenues of approximately C$4 million and positive EBITDA.
Acquisition Details
The target company is a leader in the respiratory home care services industry in the Northeastern United States. It currently has four locations and, with this acquisition, Protech will further expand its geographical footprint to provide more services in the United States. According to the LOI, Protech expects to close the acquisition with a mix of cash and stock. The acquisition is being made at a reasonable multiple and is EBITDA accretive. Closing of the acquisition is subject to final due diligence, negotiation and execution of a definitive purchase agreement and all necessary approvals, which is anticipated to be within the next
30 days.
The acquisition is expected to increase Protech’s annual revenues by approximately C$4 million. When combined with existing operations, Protech expects its annualized run-rate revenue to exceed C$90 million before any expected additional revenue generated from organic growth, cross selling and corporate synergies.
“This type of company is an example of the strategic acquisitions we’re going to continue to pursue," said Greg Crawford, Chairman and CEO of Protech. "The acquisition is immediately accretive, increasing revenue and EBITDA as we use our regional expertise and infrastructure to achieve profit growth through our integration platform. These types of acquisitions are an effective way to increase market penetration in our existing markets and will continue to be one of the core strategies to augment our growth. We are particularly delighted by the target’s product mix, largely focused on the respiratory market, which we have a particular affinity towards given its extremely positive market fundamentals.”
M&A Pipeline Update
As previously announced, the Company is focused on the implementation of a corporate strategy that incorporates technology, organic growth and strategic acquisitions to continue to improve upon its recent financial results. Post acquisition, the Company will have more than C$5 million in cash to continue to pursue additional acquisitions. The potential acquisitions will strategically focus on geographic locations driven by product mix, distribution volumes as well as the ability to consolidate distribution channels to drive operating efficiencies and maximize earnings accretion.
“We continue to build our pipeline of qualified acquisition targets,” said Hardik Mehta, CFO of Protech. “In addition to this LOI, we are also in the final stages of signing an LOI with a company generating significant revenue. While the deal terms have been agreed upon, we are awaiting final approvals on the seller side. Additionally, we have a pipeline of several companies with which we are in active negotiations, and we continue to execute NDAs with new potential targets. These targets have combined revenue of more than C$40 million. With many excellent acquisition targets to choose from, we will continue to be extremely disciplined about the acquisitions we pursue and focus on those where we can achieve favorable pricing and optimal accretion.”
ABOUT PROTECH HOME MEDICAL CORP.
The Company provides in-home monitoring and disease management services for patients in the United
States healthcare market.
The primary business objective of the Company is to create shareholder value by offering a broader range of services to patients in need of in-home monitoring and chronic disease management. The Company’s organic growth strategy is to increase annual revenue per patient by offering multiple services to the same patient, consolidating the patient’s services and making life easier for the patient.
Forward-Looking Statements
Certain statements contained in this press release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to the Company, including: Protech expecting to close the acquisition with a mix of cash and stock; closing of the acquisition within the next 30 days; the acquisition expected to increase Protech’s annual revenues by approximately US$4 million; Protech expecting its annualized run-rate revenue to exceed $90 million; and potential additional acquisitions; are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions, including, without limitation: the terms of the acquisition remaining the same; receipt of all necessary approvals for the acquisition; negotiation and execution of a definitive agreement and all closing conditions being waived or satisfied in a timely manner; the Company’s ability to maintain/slightly increase its collections ratios; the Company maintaining its gross margins and maintaining its revenue growth; and the Company maintaining its selling, general and administrative expenses. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. Examples of such risk factors include, without limitation: credit; market (including equity, commodity, foreign exchange and interest rate); liquidity; operational (including technology and infrastructure); reputational; insurance; strategic; regulatory; legal; environmental; capital adequacy; the general business and economic conditions in the regions in which the Company operates; the ability of the Company to execute on key priorities, including the successful completion of acquisitions, business retention, and strategic plans and to attract, develop and retain key executives; difficulty integrating newly acquired businesses; the ability to implement business strategies and pursue business opportunities; low profit market segments; disruptions in or attacks (including cyber-attacks) on the Company's information technology, internet, network access or other voice or data communications systems or services; the evolution of various types of fraud or other criminal behavior to which the Company is exposed; the failure of third parties to comply with their obligations to the Company or its affiliates; the impact of new and changes to, or application of, current laws and regulations; decline of reimbursement rates; dependence on few payors; possible new drug discoveries; a novel business model; dependence on key suppliers; granting of permits and licenses in a highly regulated business; the overall difficult litigation environment, including in the U.S.; increased competition; changes in foreign currency rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the availability of funds and resources to pursue operations; critical accounting estimates and changes to accounting standards, policies, and methods used by the Company; and the occurrence of natural and unnatural catastrophic events and claims resulting from such events; as well as those risk factors discussed or referred to in the Company’s disclosure documents filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should any factor affect the Company in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.
The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This news release does not constitute an offer for sale of securities, nor a solicitation for offers to buy any securities. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the company and management, as well as financial statements.
For further information please visit our website at www.protechhomemedical.com, or contact:
Hardik Mehta
Chief Financial Officer
Protech Home Medical Corp.
859-300-6455 investorinfo@myphm.com
For Investor Enquiries:
Jonathan L. Robinson CFA Partner
Oak Hill Financial Inc.
416-669-1001 jrobinson@oakhillfinancial.ca