Centric Health to Acquire Renowned Shouldice Hospital
- Acquisition of Provider of "Gold Standard" Hernia Technique Strengthens Platform for Centres of Excellence -
TORONTO, Sept. 7, 2012 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH), Canada's leading diversified healthcare company, today announced that it has agreed to acquire certain assets of Shouldice Hospital Limited ("Shouldice"). Shouldice is a well-known independent hospital focused exclusively on abdominal hernia repair, located in Thornhill (North Toronto), Ontario, Canada. The hospital facility consists of 89 overnight beds and five operating rooms. Assets to be acquired include all operating assets, the "Shouldice" name and trademarks, all equipment and a normalised level of working capital but shall not include any land or buildings. Centric will enter into a triple net lease on the land and buildings for a period of up to 48 months subsequent to closing.
"Shouldice is world renowned for its unique methodology and success in treating and repairing abdominal hernias and attracts patients from across Canada and internationally," said Dr. Jack Shevel, Executive Chairman, Centric Health. "This Centre of Excellence, which was started in 1945 by Dr. Earl Shouldice, one of Canada's medical entrepreneurs, is an excellent fit with our existing Surgical and Medical Centres division. The Shouldice brand offers the same values to which Centric ascribes in its commitment to deliver the highest-quality patient care and results."
The total purchase consideration for Shouldice, assuming no debt, is $14,250,000 in cash or, at the option of Centric Health, $13,500,000 in cash and $750,000 in Centric Health shares at a price equal to the five-day volume weighted average share price immediately prior to closing. The purchase price represents an Adjusted EBITDA¹ multiple of approximately 5.5x. The total purchase consideration is payable at closing, subject to an indemnification holdback, and not subject to earn-out targets.
The Agreement is subject to confirmatory due diligence, regulatory approvals and other customary closing conditions. Until all the closing conditions are satisfied or waived, there can be no assurances that this transaction will be completed. If all closing conditions are satisfied, closing is expected to occur on or before October 15, 2012.
About Shouldice Hospital
Located in Toronto, Ontario, Canada, Shouldice is the world's leading hernia repair facility with a staff of approximately 160 employees, including 14 surgeons. It began operations in 1945 and today performs more than 7,500 hernia repairs each year, representing approximately one-third of such procedures performed in Ontario each year. The Shouldice technique is recognized as one of the safest techniques for hernia repair with a 99.5% success rate on primary inguinal hernias (historical internal follow-up) and has been lauded as a "gold standard" technique, which has produced the highest standards of surgical results worldwide.
About Centric Health's Surgical and Medical Centres
Including the proposed acquisition of Shouldice, Centric Health will have eight Surgical and Medical Centres across Canada with a total of 24 operating rooms and 175 beds. In addition to Shouldice, the segment is comprised of the operations of the Don Mills Surgical Unit in Toronto, Ontario, Blue Water's three locations in Sarnia, Windsor and London, Ontario, London Scoping Centre in London, Ontario, False Creek Health Centre in Vancouver, British Columbia, Canadian Surgical Solutions in Calgary, Alberta and Maples Surgical Centre in Winnipeg, Manitoba. Under the direction of the Company's Medical Director for Surgical Centres, Dr. Glenn Copeland, the Company plans to establish premier Centres of Excellence across Canada focusing on the provision of specialty niche healthcare services that offer the highest standards of care with cutting edge technology. The Company is undertaking this endeavour in partnership with Canada's leading healthcare professionals, aligning the interests of all parties to ensure that patients' expectations are exceeded.
About Centric Health
Centric Health's vision is to be Canada's premier healthcare company, providing innovative solutions centered on patients and healthcare professionals. As a diversified healthcare company with investments in several niche service areas, Centric Health currently has operations in medical assessments, disability and rehabilitation management, physiotherapy and surgical centres, homecare, specialty pharmacy and wellness and prevention. With knowledge and experience of healthcare delivery in international markets and extensive and trusted relationships with payers, physicians, and government agencies, Centric Health is pursuing expansion opportunities into other healthcare sectors to create value for all stakeholders with an unwavering commitment to the highest quality of care. Centric Health is listed on the TSX under the symbol CHH. For further information, please visit www.centrichealth.ca and www.lifemark.ca. Centric Health's strategic advisor is Global Healthcare Investments & Solutions, Inc. ("GHIS") (www.ghis.us). GHIS and entities controlled by shareholders of GHIS are currently the largest shareholders of Centric Health.
This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. These forward-looking statements include, among others, statements regarding business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Centric Health and described in the forward-looking statements contained in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits Centric Health will derive there-from.
(1) The Company defines EBITDA as earnings before depreciation and amortization, interest expense, change in fair value of derivative financial instruments, loss on disposal of property and equipment, stock based compensation and income taxes. Adjusted EBITDA is defined as EBITDA before non-recurring expenses, transaction costs related to acquisitions and changes in the fair value of the contingent consideration liability recognized in the statement of income. Management believes that Adjusted EBITDA is a useful financial metric as it assists in the ability to measure cash generated from operations. EBITDA and Adjusted EBITDA are not recognized measures under IFRS.
SOURCE: Centric Health CorporationFor further information:
Chief Financial Officer
The Equicom Group
416-815-0700 ext. 257