QHR signs definitive agreement with Open EC Technologies Inc.
KELOWNA, BC, July 16, 2012 /CNW/ - (TSX-V: QHR) QHR Technologies Inc. ("QHR" or the "Company"), a leader in the Canadian Healthcare Information Technology sector, is pleased to announce that the Company and Open EC Technologies, Inc. ("OEC") (TSX-V: OCE), in accordance with the letter agreement previously announced on June 11, 2012, have entered into a definitive arrangement agreement whereby QHR will acquire all of the issued and outstanding securities of OEC.
Under the terms of the transaction, which is structured as a Plan of Arrangement pursuant to the Business Corporations Act (British Columbia), holders of OEC common shares ("OEC Shares") can elect to exchange their OEC Shares for common shares of QHR ("QHR Shares") at a ratio of twelve (12) OEC Shares for each QHR Share, or sell their OEC Shares for cash at a price of $0.04 per OEC Share. Where no affirmative election is made, the OEC shareholder will be deemed to have made the election to receive cash.
Holders of OEC share purchase warrants and options will exchange their securities for QHR Shares at various rates depending on the class or series (some warrants will be exchanged at a ratio of 3.75 to 1, others at a ratio of 9.0 to 1, and options will be exchanged at a ratio of 10 to 1). QHR Shares issued in exchange for OEC Shares will be subject to a resale restriction of twelve months after the completion date, while QHR Shares issued in exchange for OEC warrants and options will be subject to an eighteen month resale restriction.
The transaction is expected to close during the month of September and is subject to a number of conditions, including receipt of TSX Venture Exchange approval, the approval of the OEC shareholders at a shareholders' meeting scheduled on September 6, 2012, and court approval.
QHR has received shareholder voting agreements from five OEC directors and officers in which each of those shareholders have agreed to vote their OEC Shares in favour of the transaction at the special meeting of shareholders called to approve the transaction. In the aggregate, those five shareholders hold 10,970,173 OEC Shares, representing approximately 18% of the issued and outstanding OEC Shares.
Evans & Evans, Inc. has rendered a fairness opinion to the Board of Directors of OEC dated July 11, 2012 that the consideration to be received by the OEC security holders pursuant to the transaction is fair, from a financial point of view, to such security holders.
Martyn Armstrong, OEC's CEO, President and a Director, stated, "We are pleased to have formalized an arrangement agreement between QHR and OEC. We believe that OEC shareholders will benefit from this transaction by owning shares of a well-capitalized company with excellent growth potential and increased liquidity. This transaction has full support of the OEC Board of Directors and Management. The next business item for Open EC is to provide shareholders with an information circular in preparation for the September 6, 2012 Open EC shareholder meeting."
Al Hildebrandt, CEO of QHR, stated, "The arrangement agreement represents an important next step towards the anticipated completion of the Open EC acquisition. This acquisition will augment QHR's growth objectives with the addition of the Open EC US Healthcare client base of 5,600 Physicians and their sophisticated technology group, which bring the experience of delivering solutions to the complex US Healthcare market. We believe our combined team and solutions will evolve into a leader in the next stages of US healthcare reform for health records adoption through implementation of standards and best practices. The Open EC acquisition brings market traction, expertise and understanding of the clearinghouse transaction processing requirements that are crucial to QHR's entry into the US Healthcare market. The business combination is expected to add other synergistic advantages in both the US and Canadian Healthcare markets to address the needs of our customers."
The definitive arrangement agreement includes a commitment by OEC not to solicit alternative transactions and requires OEC to pay a termination fee of between $200,000 and $400,000 to QHR under certain conditions, as well as the repayment of the $250,000 secured loan already advanced to OEC. In addition, QHR has the right to match any unsolicited competing offer which may be made.
A full copy of the definitive arrangement agreement will be filed by each of QHR and OEC with the Canadian securities regulatory authorities and will be available at www.sedar.com. In addition, a detailed description of the agreement will be included in the management information circular which will be mailed to OEC shareholders in advance of the proposed special meeting of shareholders scheduled for September 6, 2012.
On behalf of the Board of Directors
About QHR Technologies Inc.
QHR operates two business units in distinct markets:
The Electronic Medical Records ("EMR") division offers a suite of medical software modules that provides computer-based medical records for family physicians, medical specialists, and surgeons, as well as administrative modules for billing and patient scheduling, that is a key component of the move throughout Canada to provide electronic healthcare records for all Canadians. The EMR division also provides on-site and off-site (ASP) hosting capabilities.
The Enterprise Management Software ("EMS") division specializes in workforce management software, which consists of integrated payroll, staff scheduling and human resource software, and in customized financial management software built on the Microsoft Dynamics GP platform. These products are targeted at complex healthcare, social services and public safety environments.
About Open EC
Open EC Technologies is an e-Business Information Technology company with our corporate head office, marketing and development in Vancouver, BC, main HealthCare IT Solutions Operations office in San Antonio, Texas and Medical Practise Billing Operations office in Spring Hill, Florida. The company has software development and data center hosting operations in Maine, with Sales and Executive Management staff in Atlanta Georgia.
The Company's focus is to provide software solutions and transaction processing services to assist Physicians, Hospitals, Health Plans, Insurance Brokers and State Governments to exchange information for HIPAA EDI Health Plan Enrolment, Health Insurance Eligibility, Health Insurance Claims, Claim Payments and HealthCare Provider Collaboration of supporting patient referral and industry compliance/reporting documentation.
Additional product and solution information is available on the web at www.SoftCareHealthcare.com, www.iPlexus.net and www.softcare.com and additional public company information is available on the web at www.openec.com. The Company's common shares trade on the TSX Venture Exchange under the symbol: OCE
Legal Notice Regarding Forward Looking Statements
This news release may contain "forward looking statements" within the meaning of applicable Canadian securities legislation. These statements are subject to risks that may cause the actual results to be materially different in future periods from those expressed or implied by such forward looking statements. Forward looking statements in this news release may include those concerning the structure and potential of the proposed plan of arrangement, completing the transaction with Open EC Technologies Inc., that QHR will acquire all of the issued and outstanding securities of OEC, that the transaction is expected to close in September, and the business combination is expected to add other synergistic advantages in both the US and Canadian Health Care markets. Risks that may prevent, delay or frustrate our objectives expressed in any of these forward looking statements include the risks inherent in transactions of this nature, including the risks that the parties cannot reach a definitive agreement, that the regulatory authorities or the Open EC shareholders do not approve the transaction when asked to do so and the risk that the transaction does not complete for other reasons, including failure of a condition, lack of capital and similar risks. It is our policy not to update forward looking statements except to the extent required under applicable securities laws. Further information on the Company is available at www.sedar.com or at the Company's website, www.QHRtechnologies.com.
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.For further information:
Al Hildebrandt, President & CEO
Jerry Diener, Chief Financial Officer