Centric Health to Acquire Medical Imaging Centres Inc. and Rads 24/7 Teleradiology Consultants

TORONTO, Sept. 20, 2011 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH), Canada's leading diversified healthcare company, today announced that it has entered into an agreement to acquire Medical Imaging Centres Inc. and certain business assets of Rads 24/7 Teleradiology Consultants (collectively "Medical Imaging Centres"). Medical Imaging Centres is a provider of diagnostic imaging and interpretation services in Ontario.  Services currently and expected to be provided include digital x-ray, ultrasound, mammography, bone densitometry, nuclear medicine, PET/CT and other related imaging services at 15 locations throughout Ontario.  In addition, Centric Health will acquire seven additional diagnostic imaging licenses in Ontario ("Dormant Licenses") which are anticipated to become operational within the next 12 months.

The total consideration to be paid on closing for the Medical Imaging Centres is comprised of $15 million in cash and the issuance of up to $24.2 million in Centric Health common shares (the "Performance Shares") at a price equal to the greater of $2.50 or 90% of the 5-day volume weighted average share price immediately prior to the closing date (the "Issue Price").  The number of Performance Shares to be released will be determined via formula and based on the business attaining EBITDA of $5.6 million for the year ended October 31, 2012 ("2012 Projected EBITDA").  In addition, an outperformance payment of up to a maximum of $7.6 million may be payable in cash or common shares, at the election of the purchaser, subject to achieving the 2012 Projected EBITDA and achieving a minimum of $6.16 million of EBITDA for the year ended October 31, 2013.  Medical Imaging Centres EBITDA margins are consistent with those in the imaging industry ranging between 20%-25%.

The total consideration to be paid on closing for the Dormant Licenses is comprised of $6 million in cash and the issuance of up to $12 million in Centric Health common shares (the "Dormant License Performance Shares") at the Issue Price.  The Dormant License Performance Shares are scheduled to be issued as the licenses become operational.  The two tranches of Dormant License Performance Shares, totaling $5 million and $7 million, will be issued at October 31, 2013 and October 31, 2014 respectively or earlier in each case if those licenses achieve defined annual revenue targets. 

The Performance Shares will be issued and delivered to, and held by, an independent escrow agent upon successful closing of the transaction, and will be released to the vendors in tranches upon the achievement of the EBITDA and revenue targets described above.  These transactions are subject to further satisfactory due diligence, definitive documentation, regulatory approvals and customary closing conditions.  Until all the closing conditions are satisfied or waived, there can be no assurances that these transactions will be completed.  If all closing conditions are satisfied, the closing is expected to occur in October 2011.

"The acquisition of Medical Imaging Centres marks a major expansion of our diagnostic imaging services offering, and builds upon the suite of imaging services provided at our False Creek and Maples facilities," said Daniel Carriere, Chief Executive Officer of Centric Health.

"This acquisition demonstrates Centric's continued commitment to delivering on its strategy to build Canada's pre-eminent healthcare service provider," said Dr. Jack Shevel, Executive Chairman of Centric Health.  "Medical Imaging Centres has a proven growth record and an entrepreneurial spirit providing Centric Health with a strong platform for growth and expansion across the country."

"Being part of Centric Health represents a significant opportunity for our team of medical imaging professionals to continue to grow the business, invest in state-of-the-art technology, and continue to provide a high standard of care for our patients," said Dr. Mick Jain, CEO of Medical Imaging Centres. "We look forward to bringing our additional Independent Health Facilities licenses into operation over the next twelve months and supporting Centric with its exciting acquisition and growth plans." Dr. Minto Jain, COO of Medical Imaging Centres added, "Our management team is a great fit for Centric, and we look forward to harnessing the inherent synergies in our respective businesses."

About Medical Imaging Centres
Medical Imaging Centres has been leading the way in outpatient imaging since 2003, providing x-ray, ultrasound, mammography, bone mineral analysis, fluoroscopy, nuclear medicine, PET, echocardiography and related imaging services to patients in multiple clinics across Ontario.  Medical Imaging Centres have grown from one clinic in 2003 to 15 clinics in 2011 with seven other licenses that are expected to become operational in the next 12 months, for a total of 22 sites. These licenses will include an independent health facility license for PET/CT services, (which is one of only three such licenses in existence in the province of Ontario) which will use the most advanced, state-of-the-art techniques and focus on Oncology and Cardiac Diagnostic Services. Medical Imaging Centres embraces technology and was among the first diagnostic centres to convert to the digital platform in Ontario, which is a testament to its forward thinking, innovative approach to healthcare.  In line with its dedication to cancer detection, the company also participates in the Ontario Breast Screening Program. Through its multiple clinics, Medical Imaging Centres completed 250,000 diagnostic tests in 2010.  Medical Imaging Centres engages 70 certified and experienced technicians and works with 14 Radiologists who are Ontario licensed, Royal College certified and includes those with subspecialty training.  The company, physician owned and operated by Drs. Mick & Minto Jain since inception, offers high quality and advanced diagnostic services.

Dr. Mick Jain, MD, FRCPC, MBA, is a Diagnostic Radiologist and completed an MBA from the Richard Ivey School of Business.  A previous Chief Radiologist at an Ontario hospital, he is also the Quality Advisor and Medical Director for Medical Imaging Centres.

Dr. Minto Jain, MD, FRCSC, MHPE, is a Surgeon/Intensivist and has completed a Masters in Health Professionals Education.  He has a strong interest in Efficient Facility Operations and Patient Focused Care.

For further information, visit www.myimagingcentre.com and rads247.com.

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.

SOURCE Centric Health Corporation

For further information:

Peter Walkey
Chief Financial Officer
Centric Health
416-496-6166 ext 329
peter.walkey@centrichealth.ca
        Catherine Love
Investor Relations
Equicom Group
416-815-0700 ext 266
clove@equicomgroup.com

 


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