Centric Health Acquires Classic Care Pharmacy
- Specialty Pharmacy Division bolstered by established Seniors Care Pharmacy Business -
TORONTO, Nov. 17, 2011 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH), Canada's leading diversified healthcare company, today announced that it has acquired 100% of the interests in Classic Care Pharmacy Corporation ("Classic Care"). Classic Care provides pharmaceutical dispensing, delivery and consulting services to long-term care homes and retirement residences. With three Ontario locations in London, Burlington and Ottawa, Classic Care currently services over 200 municipal, non-profit and for-profit care homes with over 16,000 residents. With various medication dispensing systems, Classic Care has created a safe and efficient medication administration process that ensures each resident receives the correct dose of medication at the correct time.
"With Classic Care's annual revenues of approximately $65 million, the acquisition significantly advances our Specialty Pharmacy Division capabilities across Ontario, and provides an excellent opportunity to expand our service offering to eldercare homes through bundling Classic Care's pharmacy services with Centric's existing rehabilitation services provided by our Seniors' Wellness Division," said Ingrid Davis, Director of Centric Health.
"Currently, less than 10% of the more than 45,000 beds serviced by Centric's Eldercare division currently receive medications from Classic, providing significant synergies and growth opportunities." said Daniel Carriere, Chief Executive Officer of Centric Health.
"Over the past decade and a half, Moe Green, Founder and CEO of Classic Care, and his team have built one of the leading pharmacy businesses focused on the seniors care market in Ontario. We look forward to leveraging Classic Care's entrepreneurial culture and extensive industry knowledge to compliment our strategy and to support our national expansion" said Dr. Jack Shevel, Chairman of Centric Health.
"Joining the Centric Health team represents an opportunity for our pharmacy to expand the services we can offer to our customers, and provides new and exciting growth opportunities for our employees," said Moe Green, founder and Chief Executive Officer of Classic Care. "Our team shares Centric's core values, and we look forward to growing the Specialty Pharmacy business in the years to come."
The total consideration paid for the acquisition was $50 million, comprised of $25 million in cash and the balance to be settled by the issuance of 14,050,469 common shares in Centric Health. 2,810,094 of the issued common shares ("Performance Shares") will held in escrow subject to certain of the Vendors' representations, warranties and indemnities including the business achieving a Warranted EBITDA(1) target of $6.7 million for the 12 months ending November 30, 2012 which, if not achieved, can be extended to an 18-month EBITDA(1) target of $10.0 million for the period ending May 31, 2013. The Company will also issue warrants to the Vendors on closing to purchase up to five million Centric Health common shares, vesting subject to the outperformance of the 12-month Warranted EBITDA target. Each warrant will entitle the holder to purchase one Centric Health common share at an exercise price equal the five (5) day volume weighted average share price of Centric Health common shares on the TSX immediately prior to the closing date. The Warrants will have a three (3) year term from the date on which they vest and become exercisable.
All required approvals have been obtained and closing conditions satisfied.
About Classic Care Pharmacy Corporation
Classic Care Pharmacy was founded in 1996 for the purpose of exclusively providing medication and consulting services to long-term care homes and retirement residences. With locations in London, Burlington and Ottawa, Classic Care is committed to setting the standard for medication safety through the employment of the most qualified individuals in the industry. The Classic Care Mission Statement is: "Dispensing care, professionalism and understanding to those who need it most." This is achieved through the vision of a dedicated, multidisciplinary team committed to delivering services to the physicians, nurses, residents and family members of the Homes it services. More information can be found at www.classiccare.ca
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, surgical and medical centres, homecare, home medical equipment, 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 / www.lifemark.ca / www.medichair.com. 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 interest expenses, income taxes, and amortization and excludes stock-based compensation expense. EBITDA is not a recognized measure under IFRS. Management believes that EBITDA is a useful financial metric as it assists in determining the ability to generate cash from operations. Investors should be cautioned that EBITDA should not be construed as an alternative to net income as determined in accordance with IFRS.
For further information:
| Peter Walkey |
Chief Financial Officer
| Lawrence Chamberlain |
416-815-0700 ext 257