Clarifying Release: Patient Home Monitoring (PHM) Announces Execution of Letters of Intent with Two Acquisition Targets; Releases Updated Investor Presentation
TAKEOVERS/ LETTER of INTENT 38 minutes ago
SAN FRANCISCO, CALIFORNIA--(Marketwired - Nov. 20, 2013) -
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.
Patient Home Monitoring Corp. (TSX VENTURE:PHM) ("PHM") announced it has executed non-binding Letters of Intent (LOIs) to acquire two additional companies servicing patients with chronic illnesses. Based upon their trailing 12-month earnings, the acquisition of these growing and profitable companies will be immediately accretive to the income statement and will substantially increase PHM's earnings-per-share (EPS). PHM also released an updated investor presentation.
PHM has agreed to pay a price that is subject to further due diligence, of 3.5 times 2013 Adjusted EBITDA. Upon initial financial due diligence, the companies have a combined unaudited October 2012 to October 2013 revenues of approximately $5.5 million and unaudited Adjusted October 2012 to October 2013 EBTIDA of approximately $1.3 million and both companies have unaudited balance sheets with net positive current assets of approximately $750,000 and no long term liabilities. Based upon the LOI, 60% to 70% of the purchase price will be paid in PHM common shares with the remainder in cash, estimated to be less than $2 million. For the equity portion of the consideration, the sellers have agreed to take PHM shares priced at $0.27 per share. The key executives of both companies have agreed to join PHM in senior management roles to continue to grow the companies, as well as to assist in growing other elements of PHM's business. PHM can close both acquisition opportunities with cash-on-hand from its current balance sheet. Because the sellers have agreed to a PHM share value of $0.27, shares issued as part of the acquisition are estimated to be less than 10% of the total common shares outstanding. PHM plans to assume a small amount of debt as part of the acquisition price. Closing the acquisitions will be subject to final due diligence and purchase agreements and TSX Venture Exchange review and approval.
When these companies are added to PHM's current operations, the expected financial results of all entities combined 12-month trailing Adjusted EBITDA will be an increase of over 400% in EBITDA growth from the prior reported quarter or in excess of $3,000,000* subject to final due diligence. In addition, the cross-selling potential is expected to further drive EBITDA growth.
The companies are located in the southeastern United States and service patients with chronic pulmonary disease. They are established companies that have been profitable for many years, and are well positioned to thrive in the changing reimbursement environment. The acquisitions would give PHM additional service lines to increase organic growth through cross-selling opportunities with PHM's existing cardiology services and pulmonology drug distribution services. Combined, these businesses service thousands of patients with multiple chronic illnesses that may benefit specifically from PHM's Coumadin testing services and pulmonology drug distribution services.
The updated investor presentation can be found on the PHM website.
"We are excited to move to the next stage with the acquisition targets. With these acquisitions, PHM's services will now cover drug delivery, essential medical equipment, home monitoring and clinical support services, making us a more complete patient home service business. The result will be healthier patients, lower costs and improved healthcare delivery," said Bob Kusher, CEO of PHM.
"We expect strong revenue growth in our service lines to continue as health care providers scale back budgets and are being forced out of providing niche, high value added products and services. I believe the willingness of the key executives who have built these businesses over the course of a decade to take a majority of their payment in PHM common shares is a testament to the opportunity they see in PHM and the transaction structure is advantageous to existing PHM shareholders."
Full article:
http://finance.yahoo.com/news/clarifying-release-patient-home-monitoring-185300031.html
PS. Interesting earnings potential, what says Fabrice, now, after so many nrs over past month or more.
Cheers,
Dave.