TORONTO, Feb. 13, 2012 /CNW/ - With reference to the news release dated November 8, 2011, Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH), Canada's leading diversified healthcare services company, today announces that all closing conditions have been satisfied and it has completed the acquisition of Motion Specialties Inc. ("Motion Specialties"). Motion Specialties Inc. is comprised of the amalgamation of all 24 Motion Specialties businesses and locations in three provinces of Canada. Motion Specialties is a leading home health care provider offering a wide variety of mobility devices, including; wheelchairs, scooters, walkers, bathroom safety equipment, portable oxygen, Continuous Positive Airway Pressure ("CPAP"), and home accessibility products such as stair lifts and home elevators.
"Motion Specialties strengthens and complements our service offerings in our Home Medical Equipment Division and extends our cross-selling capabilities to patients in our other business units such as our 155-clinic strong physiotherapy network, medical assessments, rehabilitation, homecare, pharmacy services, and over 45,000 residents in long term care and retirement homes serviced by Centric," said Daniel Carriere, Chief Executive Officer of Centric Health. "The merger is further supported by management's remarkable track record in guiding the company through a significant period of growth. This, combined with a distinctive focus on quality care and value added services will be an asset to the Centric Health team and we are excited to welcome over 475 Motion employees to the Centric Family."
"Being part of Centric Health is a natural evolution for our organization and we look forward to shared success by continuing to provide Canadians access to a superior selection of home health care products," said David Fraser, President of Motion Specialties. "We see an excellent strategic fit between Motion Specialties and Centric Health and are excited by the growth opportunities within the Canadian healthcare sector."
David Fraser joined Motion Specialties in 2006 with an extensive background in the health care industry. Prior to joining Motion, David was the Senior Vice President of Shoppers Home Health Care for approximately six years, and prior to that held senior management positions with Shoppers Drug Mart for 14 years. Under David's leadership, Motion Specialties has experienced compounded annual sales growth in excess of 15%.
For the twelve months ended May 31, 2011 Motion Specialties generated consolidated annual revenue of $78 million and EBITDA margins of 6% to 7%. The total consideration to be paid for Motion Specialties is based on a 3 year performance based formula, comprised of up to $30 million in cash and the issuance of up to 12.5 million Centric Health common shares a portion of which is to be released on achieving the actual EBITDA performance targets over a 3 year period as outlined below:
| Cash Consideration
| Share Consideration
(# of Shares)
|At Closing||$15 million||3.5 million|
|Dec 31, 2012||$7 million||$5 million||2.5 million|
|Dec 31, 2013||$10 million||$5 million||2.5 million|
|Dec 31, 2014||$13 million||$5 million||4.0 million|
|Totals||$30 million||12.5 million|
The Company will also issue warrants to the vendors to purchase up to 7.5 million Centric Health common shares accrued based on outperformance of the total 3-year EBITDA target. Each warrant will entitle the holder to purchase one Centric Health common share at an exercise price equal to the five-day volume weighted average share price of Centric Health common shares on the TSX immediately prior to the closing date ("the Exercise Price"). The Warrants will have a two year term from the date on which they vest and become exercisable.
Notably, as stated in the May 6, 2011 press release announcing the agreement to acquire LifeMark Health, LifeMark had certain acquisitions in progress, which included Motion Specialties. The EBITDA contribution and purchase consideration for Motion Specialties will be taken into consideration in the LifeMark valuation formula.
About Motion Specialties Inc.
Motion Specialties began in Toronto in 1985, providing comprehensive home health care and accessibility solutions for mobility requirements. Motion Specialties is an independent Home Health Care vendor with a network of 24 stores in Ontario, Alberta and British Columbia. Motion Specialties provides a wide variety of mobility devices, including; wheelchairs, scooters, walkers, bathroom safety equipment, portable oxygen, CPAP, and home accessibility products such as stair lifts and home elevators. Motion Specialties also provides custom alteration and design options for seating and positioning systems to clients in their own homes, long term care and retirement homes, group homes, assisted living facilities and hospital and rehab centres across Canada.
Motion Specialties provides mobility services to over 200 homes across Canada. Motion is also a provider of mobility solutions to the pediatric population, helping parents find the best pediatric equipment to support their children and help them reach their highest level of function through a positive equipment selection process. For further information, please visit www.motionspecialties.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 and surgical centres, homecare, specialty pharmacy and wellness and prevention. In addition, Centric's Home Medical Equipment Division under the MEDIchair brand has 70 stores across Canada. 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 through 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 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.
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