CML HealthCare Inc.

CML HealthCare Inc.

November 07, 2011 22:00 ET

CML HealthCare Sells U.S. Imaging Operations

MISSISSAUGA, ONTARIO--(Marketwire - Nov. 7, 2011) - CML HealthCare Inc. (TSX:CLC) (the "Company" or "CML"), is exiting its medical imaging operations in the United States by entering into two separate agreements to sell the business to RadNet, Inc. ("RadNet") and The Johns Hopkins Health System Corporation ("Johns Hopkins") for a combined total consideration of US$51.5 million.

The transaction with RadNet included all of CML's medical imaging operations in the U.S., comprising 21 centres, with the exception of two imaging centres sold to Johns Hopkins. The business was sold to RadNet for total consideration of US$42.9 million including US$28.2 million cash, a US$9.0 million note receivable, and US$5.7 million capital lease obligations assumed by RadNet. The transaction closed on November 7, 2011. The note receivable bears interest at 6% per annum and is repayable in equal monthly instalments over five years.

The agreement with Johns Hopkins provides for the sale of certain assets related to two imaging centres in Maryland for cash consideration of US$8.6 million. This transaction is subject to certain closing conditions and the proceeds from this sale are expected to be received in the first quarter of 2012.

Upon closing of both transactions, net cash proceeds of approximately US$34 million, net of transaction costs, will be used to reduce CML's net debt as the proceeds are received.

"After conducting a thorough review and financial assessment of its U.S. operations, divesting this business was determined to be in the best interests of the Company and its shareholders. CML wishes RadNet and Johns Hopkins well as they continue to offer excellence in patient care to the community in Maryland, Delaware and Rhode Island," said Patrice Merrin, Chairman of the Board and interim Chief Executive Officer. "CML will build on its businesses in Canada, operating 118 laboratory collection centres and 77 diagnostic imaging centres across Ontario, 19 imaging centres in British Columbia, and nine imaging centres in Alberta," she continued. "Kent Wentzell, Senior Vice President U.S. Operations will return to CML as Senior Vice President, Imaging Operations."

About CML HealthCare Inc.

Based in Mississauga, Ontario, CML HealthCare Inc. is a leading provider of laboratory testing services in Ontario operating 118 laboratory collection centres and the largest provider of medical imaging services in Canada with 105 imaging centres. CML is publicly-traded on the Toronto Stock Exchange under the symbol "CLC" and has approximately 89.8 million common shares outstanding. For more information, please visit

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This document includes forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and other provincial securities law in Canada. These forward-looking statements include, among others, statements with respect to our objectives, goals and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective" and "continue" (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. We caution readers not to place undue reliance on these statements, as a number of important factors, many of which are beyond our control, could cause our actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: dependence on government-based revenues in Canada; general economic conditions; pending and proposed legislative or regulatory developments in Canada including the impact of changes in laws, regulations and the enforcement thereof; reliance on funding models in Canada; intensifying competition resulting from established competitors and new entrants in the businesses in which we operate; our ability to complete strategic acquisitions and to integrate our acquisitions successfully; insurance coverage of sufficient scope to satisfy any liability claims; operational and infrastructure risks including possible equipment failure and performance of information technology systems; fluctuations in total patient referrals; technological change and obsolescence; loss of services of key senior management personnel; privacy laws; ability to pay dividends in the future; structural subordination of common shares; leverage and restrictive covenants; fluctuations in cash timing and amount of capital expenditures; tax-related risks; unpredictability and volatility of the price of common shares; dilution; and future sales of common shares.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When reviewing our forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations, and about material factors or assumptions applied in making forward-looking statements, may be found in the "Risk Factors" section of our Annual Information Form, under "Business Risks" and elsewhere in our Management's Discussion and Analysis of Operating Results and Financial Position ("MD&A") for the year ended December 31, 2010 and elsewhere in our filings with Canadian securities regulators. Except as required by Canadian securities law, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf. Such statements speak only as of the date made.

Contact Information

  • CML HealthCare Inc.
    Alice Dunning
    Director, Corporate Communications
    (905) 565-0043 ext. 3472
    (905) 565-2844 (FAX)

    CML HealthCare Inc.
    Tom Weber
    Executive Vice President & Chief Financial Officer
    (905) 565-0043 ext. 3204
    (905) 565-2844 (FAX)