| 09 Dec 2013 08:00 ET |  |
CNW Group QHR Corporation (TSX-V: QHR) ("QHR" or the "Company") today announced that it has executed a definitive and binding agreement for the sale of substantially all assets and operations of its Enterprise Management Solutions ("EMS") division to Logibec Groupe Informatique Ltée ("Logibec") for the amount of $20 million in cash less working capital adjustments and customary expenses (the "Transaction"). Logibec is one of Canada's largest healthcare technology companies specialized in the development, marketing, implementation and support of clinical and administrative information systems Logibec is a portfolio company of OMERS Private Equity ("OPE"), the manager of the private equity assets of OMERS, one of Canada's largest pension funds. The Transaction is expected to close in December 2013, subject to satisfactory completion of closing conditions. Under the Transaction, Logibec will acquire the assets and operations of the EMS division, including customer relationships, all Quadrant-branded products, related intellectual property, fixed assets and will assume certain liabilities. All employees in the EMS division will be offered employment with Logibec. Logibec will also take over office facility leases in Kelowna, BC and Winnipeg, MB that are related to the EMS Division. Al Hildebrandt, President and CEO of QHR, said "Today's announcement is the result of a comprehensive process undertaken by QHR, our Board of Directors and our external advisors to carefully consider alternatives for our EMS division and how the Transaction will impact our shareholders, our customers and our employees. We have made a strategic decision to continue our aggressive focus and growth plans in the Electronic Medical Records (EMR) and Revenue Cycle Management (RCM) markets. In addition, QHR will realize a solid return for the investment we made in the EMS business. This transaction will provide significant financial resources and capacity to accelerate our market growth in the Canadian and US healthcare markets with our EMR and RCM solutions where we believe SaaS model market opportunities can be expanded." Mr. Hildebrandt added, "Quadrant has been a leader in the healthcare and social services workforce management software market for many years and has earned a strong reputation for solid execution, high-quality products and high-quality support. This acquisition by Logibec, the market leader in Quebec, offers the Quadrant product line an excellent home with strong product line synergy and a focus for growth in the workforce management market. Under the ownership of Logibec, our current Quadrant customers can expect continued high-quality service levels and performance. The Quadrant client base should experience a seamless transition with continuous staffing and will become part of Canada's largest pure-play healthcare service provider." "The acquisition of Quadrant accelerates Logibec's effort to offer powerful and scalable solutions in the health and social services market across Canada," said Marc P. Brunet, Logibec President and CEO. "Building on our established reputation in the area of workforce and financial management solutions for complex care settings, this transaction allows us to consolidate the natural synergies between two sets of market leading offerings and deliver cost-effective solutions to a broader array of healthcare institutions and agencies." Upon completion of the Transaction, QHR will retain all of its corporate resources, the EMR division and the RCM division in their entirety. Going forward, QHR will remain focused on providing innovative solutions to support healthcare customers across a broad range of high-growth markets within Canada and the United States. QHR intends to use the net proceeds from the Transaction to continue its acquisition strategy in the EMR and RCM markets and to invest in continued technology research and development for SaaS applications. These strategies have the objective of accelerating revenue and earnings growth, both organically and via acquisition, and strengthening and expanding QHR's leadership position in existing and new markets. Art Mesher, Chairman of QHR's Corporate Development Committee, said "During the course of this past year our objectives have been to strengthen our management team, focus on stabilizing cash flow, and strengthen our balance sheet. I would like to congratulate Al on today's announcement, I believe Logibec is the best steward for our EMS customers and this is the culmination of completing our objectives for this past year and now we are able to focus on growth in our recurring revenue business model going forward." "The Transaction will result in QHR having a sharpened focus on driving profitable growth," said Jerry Diener, Chief Financial Officer of QHR. "We will continue to focus on refining our cost structure to support scalable growth with improved margins and on our recurring revenue growth model. Approximately $19 million of our current run rate of $25 million of recurring revenue is derived from our remaining EMR and RCM Divisions. We are fully invested for growth, and as we continue to build our business, we expect to see greater operating leverage going forward." Paradigm Capital Inc. and Aeson Leeds Inc. are acting as financial advisors, and Clark Wilson LLP is acting as legal counsel to QHR. Conference Call to Discuss the Transaction The Company executives will host a conference call at 2:00 PM EST (11:00 AM PST) Monday, December 9, 2013, to discuss the Transaction. To join the conference call, please dial Toll Free 1-888-390-0605, Conference |