Another acquisition + outlook 08:30 EDT Friday, September 22, 2017
VANCOUVER, Sept. 22, 2017 /CNW/ - CRH Medical Corporation (TSX: CRH) (NYSE MKT: CRHM) (the "Company"), announces that it has completed an accretive transaction whereby CRH has acquired a 51% interest in a gastroenterology ("GI") anesthesia practice in Raleigh, North Carolina ("Raleigh").
Raleigh provides anesthesia services to three ambulatory surgical centers in North Carolina. The transaction was financed through a combination of CRH's credit facility and cash on hand.
Raleigh transaction highlights:
- Total 2018 annual estimated revenue1 of US$5.3 million
- EBITDA and cash flow accretive
- Structured as joint venture with CRH acquiring a 51% interest
| 1 Total 2018 annual estimated revenue takes into consideration the Centers for Medicare and Medicaid's proposed 2018 Physician Fee Schedule. Please refer to our news release dated July 17, 2017 for more details. |
Outlook for Q3 2017
The Company is providing an outlook for the three months ending September 30, 2017. This outlook reflects: (a) recent data implying that commercial insurance patient cases will not increase as much as expected in Q3 2017 compared to Q2 2017, (b) the expected impact of Hurricane Irma on facilities we serve in the Southeastern United States resulting in approximately 1,500 procedures being cancelled, and (c) the positive impact of our recently announced acquisitions. The Company is providing this outlook to clarify shareholder expectations considering such factors affecting the Company. For the three months ending September 30, 2017, total revenue is expected to be approximately US$22.7 million. Adjusted Operating EBITDA2 attributable to shareholders for the period is estimated to be approximately US$7.3 million.
| 2 Adjusted operating EBITDA is a non-IFRS measure defined as operating income before interest, taxes, depreciation and related expenses, amortization, stock-based compensation, acquisition-related expenses, and asset impairment charges. Refer to the Company's Financial Report for the quarter ended June 30, 2017 for a reconciliation of reported financial results to non-IFRS measures. |
Edward Wright, CEO of CRH, commented on the transaction, "We are thrilled to partner with Raleigh, another existing O'Regan customer, to grow our operations in North Carolina. This is our fifth acquisition this year and it brings us closer to achieving our anesthesia expansion objectives for 2017."