- Established, highly regarded bariatric surgery program to be rolled out across Centric Health's surgical centre network -
TORONTO, Dec. 2, 2013 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH), today announced that it has acquired a 75% interest in SmartShape Weight Loss Centres ("SmartShape"), a leader in state-of-the-art bariatric (weight loss) surgical procedures currently operating within a world-class surgical facility in Mississauga, Ontario. The remaining 25% of SmartShape will continue to be owned by Dr. Chris Cobourn, one of Canada's foremost bariatric surgeons and a founder of SmartShape. Dr. Cobourn will oversee the expansion of Bariatric Centres of Excellence into Centric Health's surgical facilities in Vancouver, Calgary, Winnipeg, Toronto and Sarnia and will also be appointed as an Advisor to the Surgical and Medical Centre division.
"This acquisition fits squarely with our strategy to partner with credible, established healthcare providers to roll out Centres of Excellence across our national network of Surgical and Medical Centres," said David Cutler, President and Chief Executive Officer, Centric Health Corporation. "Obesity is a prevalent and growing healthcare issue and Centric Health is committed to partnering with leaders in this field to provide meaningful solutions with the highest levels of care and outcomes. SmartShape has a proven business model and track record of success that will significantly expand our market share while providing an exciting opportunity to bring scale to the brand nationally."
Mr. Cutler continued, "SmartShape will be the only national surgical weight loss program with a presence in six surgical centres across Canada, helping patients get faster, local access to care. Importantly, access to a world-class surgical facility in Mississauga further expands Centric's surgical footprint and its ability to expand into other surgical procedures in the Greater Toronto Area."
Dr. Cobourn has been a General Surgeon for 25 years. He is credited with introducing laparoscopic (minimally invasive surgery) to the Greater Toronto Area in 1991 and has become an expert in advanced laparoscopic procedures, specializing in adjustable gastric band procedures and has published multiple peer-reviewed articles about bariatric surgery and ambulatory surgery. Dr. Cobourn, in partnership with Dr. Frank Lista founded SmartShape in 2005. Prior to that he served as Chief of Surgery at Trillium Health Centre, a hospital with campuses located in Mississauga and Etobicoke for more than 10 years. Dr. Cobourn is a member of the Ontario Medical Association, the Ontario Association of General Surgeons, the Canada Association of General Surgeons, the Canadian Association of Bariatric Physicians and Surgeons, and the American Society of Metabolic and Bariatric Surgeons.
"We are honored to partner with Dr. Cobourn, not only one of this country's foremost bariatric surgeons, but importantly also someone who embodies the spirit of entrepreneurship, quality care and outcomes and innovation that underlies the Centric Health vision," Mr. Cutler added. "His extensive experience, which includes more than a decade overseeing the Surgical Department at a large urban hospital, will be invaluable as we continue to grow and expand our Surgical and Medical Centres segment."
"Centric Health shares my passion and commitment to providing the highest quality of care to patients, and I am very excited about the opportunity to introduce SmartShape's proven bariatric programs to its surgical facilities across Canada," said Dr. Cobourn. "At SmartShape, we have an experienced and dedicated team of professionals that provide safe and effective weight loss programs. I look forward to working with Centric Health's management team to leverage the many growth opportunities that exist across its comprehensive Canadian healthcare platform."
The total purchase consideration includes a combination of $1.6 million cash, 1,075,000 Centric Health common shares to be released based on achieving earn out targets and 500,000 Centric Health outperform warrants. For the year ended December 2012, SmartShape generated revenue of approximately $5 million and has achieved EBITDA margins in the range of 10% to 12% over the past three years. The consideration represents a multiple of the cash portion to EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately 4 times. The acquisition is expected to be accretive to Centric Health's adjusted EBITDA and contribute positive cash flow from operations beginning in the first quarter of 2014.
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.
SmartShape is recognized as the leading clinic of its kind in Canada by healthcare practitioners and organizations such as Canadian Obesity Network. Smartshape has published its results in leading peer-reviewed journals and is recognized as a world leader in the safety and efficacy of the gastric band procedure. SmartShape will be headquartered in a 10,000-sq.-ft. state-of-the-art facility which has two fully-equipped operating theatres that meet or exceed all of the quality standards established by the College of Physicians and Surgeons of Ontario. The clinic boasts an unrivalled team of surgeons, clinical nurse specialists, anaesthetists, dieticians and support staff dedicated to treating weight-loss patients, primarily through adjustable gastric band procedures using the LAP-BAND® System. SmartShape also has an affiliate network of physicians and nurses to support aftercare, including band adjustments. Partnering with Centric Health's nationwide network of facilities and staff will allow Smartshape to more effectively deliver its programs to patients from across Canada. SmartShape has performed more than 4,000 gastric band procedures, approximately 99% of which were performed on an ambulatory basis, making Smartshape one of the leading clinics in the world in this area. Website: www.smartshape.ca
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.
SOURCE: Centric Health Corporation
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