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Agility Health Announces Proposed Acquisition Resulting in Pro Forma Revenues Exceeding US$100 MILLION


July 21, 2014 - Grand Rapids, MI

GRAND RAPIDS, MI--(Marketwired - July 21, 2014) -  Agility Health, Inc. (TSX VENTURE: AHI) ("Agility Health" or the "Company"), a leading provider of physical rehabilitation and software services that benefit patients, healthcare providers and employers is pleased to announce that it has entered into a letter of intent to acquire 100% of an undisclosed target company (the "Target"), a leading provider of contract physical rehabilitation services in the United States. The total acquisition consideration of $20.8 million cash at closing represents less than 5 times the anticipated pro forma EBITDA of the combined entity and would expand Agility Health operations to more than 200 sites across 26 states with more than 1,800 employees providing services for approximately 2 million patient visits per year. The acquisition of the Target will be immediately accretive to Agility's earnings with pro forma 2013 annual revenues assuming completion of the acquisition in excess US$100 million.

The closing of the acquisition, expected to occur in the third quarter of calendar 2014, is subject to confirmatory due diligence and the satisfaction of certain conditions customary for transactions of this nature, including the execution of definitive agreements, TSXV and other corporate regulatory approvals, and the arrangement of adequate financing, among other conditions.

Steven N. Davidson, CEO of Agility Health said, "This would be an important milestone in Agility's stated objective to becoming a national presence in the physical rehabilitation market, with revenues having grown under Agility's current leadership from US$20 million in 2003 to what would be over US$100 million following the acquisition. Our business plan and our review of the market call for Agility to make additional acquisitions of this size and quality, and we are thrilled to be taking another step toward realizing that vision." 

Expected Benefits of the Transaction:

  • Agility would become one of the largest independent providers of contract physical rehabilitation services to acute care hospitals in the United States.
  • Allows for immediate scale in revenue to over US$100 million
  • Allows for immediate scale in EBITDA of approximately US$10M in adjusted EBITDA2
  • Increases the footprint to over 200 sites across 26 states with approximately 2 million patient visits per year
  • Strong cultural fit with a tradition of exceptional quality and service allows for cross-selling opportunities
  • Immediately accretive to Agility

For the year ended December 31, 2013, the audited consolidated financial statements of the Target reported US$39.1 million in net revenues and a net loss of US$2.0 million. During that same period, the Target generated US$2.3 million in adjusted EBITDA1. As at December 31 2013, the Target reported total assets of US$21.2 million and total liabilities of US$20.2 million.

1Adjusted EBITDA as defined by the Company means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, non-controlling interests, and Loss (Gain) on currency conversion. Adjusted EBITDA is a non-IFRS measure.

About Agility Health

Through its subsidiary and principal operating entity, Agility Health, LLC, Agility Health operates a multi-state network of outpatient rehabilitation clinics and provides contracted services to hospitals, nursing homes and other institutional clients, providing care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers, and a variety of other injuries and conditions. In addition, Agility Health provides a number of ancillary services related to physical rehabilitation, including practice management software systems and custom orthotics. Agility Health operates 74 outpatient or onsite rehabilitation locations in 17 states. Agility Health's contract therapy services business provides rehabilitative services to 41 hospitals and inpatient rehabilitation units, 36 nursing homes, long-term care facilities and other service locations in 9 states. For more information, please visit investors.agilityhealth.com.

Forward-Looking Statements

This press release contains statements that are considered to be forward-looking within the meaning under securities laws. The above disclosed Revenue and Adjusted EBITDA figures are unaudited and may change subject to due diligence and closing procedures. They are intended only as an estimate of trailing twelve month Revenue and Adjusted EBITDA of the combined entities and are not meant to convey forward looking information. Adjusted EBITDA is a Non-IFRS measure the Company uses as an indicator of financial health, and excludes several items which may be useful in the consideration of the financial condition of the Company, including interest expense, taxes, depreciation, amortization, stock based compensation, and owner compensation. Implicit in this information, particularly in respect of the future outlook of Agility and anticipated events or results, are assumptions based on beliefs of Agility's senior management as well as information currently available to it. While these assumptions were considered reasonable by Agility at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue operations, decline of reimbursement rates, dependence on few payors, possible new drug discoveries, a novel business model, dependence on key suppliers, granting of permits and licenses in a highly regulated business, competition, low profit market segments as well as general economic, market and business conditions, and could differ materially from what is currently expected. 

This press release does not constitute and the subject matter hereof is not, an offer for sale or a solicitation of an offer to buy, in the United States or to any "U.S. Person" (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "1933 Act")) of any equity or other securities of AGILITY. The securities of AGILITY have not been registered under the 1933 Act and may not be offered or sold in the United States (or to a U.S. Person) absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act. 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information please contact:
Agility Health, Inc.
Steven N. Davidson
Chief Executive Officer
Tel: (616) 356-5000 

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