Alegro Health Corp. announces agreement to acquire the business of Active Health Management Inc. and Brenda Rusnak Clinics Inc.



    
    Transformative event gives Alegro critical mass, earnings and cash flow
    to further growth strategy
    

    TORONTO, May 5 /CNW/ - Alegro Health Corp. (TSX-V: AGO) ("Alegro"), a
provider of medical, surgical and disability management services, today
announced that it has entered into an agreement to acquire the business of
Active Health Management Inc. and The Brenda Rusnak Clinics Inc.
(collectively, "Active Health"), the first major acquisition arising out of
its 2007 strategic alliance with Global Healthcare Investments & Solutions,
Inc. ("GHIS"). The acquisition of the business of Active Health, a privately
held healthcare company specializing in high quality rehabilitation services
that focus on physiotherapy, assessment services, physiotherapy network
management and elder care, is complementary to Alegro's current core
businesses of providing multidisciplinary rehabilitation and assessment
services through its Work Able Centres and Direct Health Solutions divisions.
    The transaction is expected to more than double Alegro's 2008 revenues of
$15.8 million and is expected to be accretive to earnings per share in the
first year. The total consideration to be paid for the acquisition will be
approximately $20.7 million, consisting of $19.7 million cash plus Alegro
shares having a value of approximately $1.0 million (based on Alegro's closing
share price of $0.30 on May 4, 2009). The cash component of the purchase price
will be funded by existing cash on hand, a primary loan of $11.0 million from
The Toronto-Dominion Bank, as well as a private placement of units of Alegro
to GHIS as described below.
    "The acquisition of Active Health will be a transformational event for
Alegro. It gives Alegro the critical mass, earnings and cash flow needed to
further its growth strategies," said Brenda Rasmussen, President and Chief
Executive Officer of Alegro Health Corp. "There is considerable synergy and
commonality between the two companies, with both providing high quality and
caring rehabilitation assessment and services for both government-funded and
privately insured clients. Active boasts an impressive group of committed and
passionate executives, management, healthcare professionals and staff, the
combination of which is a key differentiator to service and quality going
forward. Staffing in both divisions is expected to remain unchanged in the
short term. In the long term we expect to recruit additional staff as the
scope and range of services is expanded."
    "I am particularly delighted about our union with Alegro," said Brenda
Rusnak, owner and CEO of Active Health. "We share many professional
similarities, respect for the professional integrity of our staff and
associates, integrity and devotion to professional excellence and quality of
care that can be definitively measured by positive and documented outcomes of
care."
    Brenda Rusnak will continue as a consultant for an initial period of at
least one year from the completion of the acquisition to assist in achieving
the orderly integration of the Active business with Alegro's business.
    "The Active infrastructure, people, network and services represent a
valuable addition to Alegro as the company strategically expands its range of
healthcare services within one of the finest healthcare systems in the world,"
said Dr. Jack Shevel, Founder and President of GHIS.
    Alegro and GHIS entered into a strategic alliance in May 2007 with the
objective of strategically expanding Alegro into one of Canada's premier
healthcare service companies through organic growth and acquisitions in
healthcare sectors which support and are complementary to existing insured
services. In this transaction, GHIS will purchase 20.5 million units at a
price of $0.33 per unit for aggregate proceeds of $6,765,000 million. Each
unit will be comprised of one common share and one common share purchase
warrant exercisable for 5 years from the date of closing at $0.33 per share.
The purchase price per unit represents a premium of approximately 70% over the
market price of Alegro at the time that the terms of the transaction were
established. As a result, GHIS' pro forma ownership will be approximately 53%
on a non-diluted basis and approximately 65% on a fully diluted basis.
    In connection with the foregoing transactions, Alegro and GHIS intend to
amend the consulting agreement they entered into in July 2007, to extend its
term for three more years, reduce GHIS's fee for completing financings and
merger & acquisitions from 2% to 1.5%, and increase GHIS's monthly consulting
fee from $15,000 per month to $20,000 per month, plus an incentive fee equal
to 1% of Alegro's weighted average market capitalization on an annual basis
beginning from the date the consulting agreement is amended (which fee is only
payable if the average market capitalization of Alegro is at least $20,000,000
during such period).
    In addition, Alegro's wholly-owned subsidiary Alegro Health Partners Inc.
("AHP") intends to repay the $750,000 debenture that it issued to GHIS
Capital, Inc. ("GHISC") in July 2007, which may be converted into a 25% equity
interest in AHP, and intends to issue to GHISC a warrant to acquire a 25%
equity interest in AHP, exercisable at a price of $33,000 in the aggregate for
a period of 3 years from its date of issuance.
    Closing of the transaction is scheduled to occur as soon as possible
following regulatory approval and not later than May 29, 2009.
    TD Securities Inc. acted as financial advisor to Alegro with respect to
the transaction.

    About Alegro Health Corp.

    Alegro Health Corp. is a leading healthcare services provider capturing
high value opportunities by providing additional access to select quality
healthcare services. Through its divisions - Disability & Rehabilitation
Management and Surgical/Hospital Services - Alegro is delivering additional
resources to the Canadian public healthcare system and addressing the growing
demand for private and enhanced out-of-pocket healthcare services. With
superior knowledge of the healthcare industry, extensive and trusted
relationships with payers, physicians, and government agencies, Alegro is
pursuing a vertically integrated approach and an aggressive acquisition
strategy to achieve its growth objectives. Alegro is listed on the TSX Venture
Exchange under the symbol AGO. For further information, please visit
www.alegrohealth.com.

    About GHIS

    GHIS is an entrepreneurial and innovative healthcare investment and
solutions company formed by Dr. Jack Shevel, the Founder and former Chief
Executive Officer of Netcare Limited, a holding company listed on the JSE
Limited, South Africa, which operates through its subsidiaries more than 120
private hospitals in South Africa and the United Kingdom. In South Africa
Netcare operates, amongst other healthcare divisions, the largest private
hospital group, primary care network medical emergency service and diagnostics
network and is a significant trainer of emergency personnel and healthcare
workers. In the United Kingdom, Netcare is the largest private acute care
hospital provider as well as an independent service provider to the National
Health Service (NHS). For further information, please visit www.ghis.us

    This press release contains statements that may constitute
"forward-looking statements" within the meaning of applicable Canadian
securities legislation. Forward-looking statements include statements that are
predictive in nature, that depend upon or refer to future results, events,
circumstances, expectations and performance, or that include words such as
"expects", "anticipates", "intends", "plans", "believes", "estimates",
"could", "should", "forecast", "continue", "seeks", "will", "future" or other
similar wording (including negative variations and grammatical variations
thereof).These forward-looking statements include, among others, statements
regarding: Alegro's proposed acquisition of Active Health and the purchase
price therefore; the completion and the outcome of the acquisition; statements
regarding transaction values; the complementary nature of the Active Health
business to Alegro's business; the expected financial impact of the
acquisition on Alegro's revenues, earnings per shares, cash flow and critical
mass; the accretive nature and expected synergies of the acquisition; the
impact of the acquisition on Alegro's growth strategy; ownership levels
resulting from the completion of the proposed private placement; the sources
of funding for the acquisition; the continuation of Brenda Rusnak as a
consultant and the impact thereof on the integration of Active Health and
Alegro; and the business strategy, plans and other expectations, beliefs,
goals, objectives and 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 Alegro and
described in the forward-looking statements contained in this press release.
Among the various factors that could cause results to vary materially from
those indicated in the forward-looking statements include: the failure to
realize anticipated synergies and benefits of the acquisition; the failure to
obtain regulatory approval; a failure to complete the primary loan and/or the
private placement; general economic, political, market and business factors
and conditions including those adversely impacting the global equity and
capital markets; statutory and regulatory developments; unexpected judicial or
regulatory proceedings; and catastrophic events. 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 Alegro will derive
there from. Accordingly, readers are cautioned to avoid placing undue reliance
on forward-looking statements due to the inherent uncertainty of such
statements.

    
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this news release.
    

    %SEDAR: 00016656E




For further information:

For further information: Brenda Rasmussen, President and CEO, Alegro
Health, (416) 927-8400 ext. 303, brasmussen@alegrohealth.com; Michael Moore,
Investor Relations, Equicom Group, (416) 815-0700 ext. 241,
mmoore@equicomgroup.com


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