Patient Home Monitoring Corp.
TSX VENTURE : PHM

January 28, 2015 09:00 ET

Patient Home Monitoring (PHM) Executes Final Purchase Agreement for Acquisition of Black Bear Medical, A Profitable $8.5 Million Annual Revenue Business

LOS ANGELES, CALIFORNIA--(Marketwired - Jan. 28, 2015) -

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. (PHM) (TSX VENTURE:PHM), a fast growing and profitable company focused on rolling-up annuity-based healthcare service companies in the US and Canada, announced it has executed a binding Purchase Agreement for the acquisition of Black Bear Medical ("BB Medical"), a profitable Maine-based company focused on providing home-based healthcare services, including mobility solutions, through several retail locations in Maine and New Hampshire. The acquisition is expected to have an immediate and positive impact on earnings-per-share (EPS) and is expected to increase total run-rate revenues of PHM to over $48 million annually, not including organic growth post-closing. Closing is subject to TSX approval for issuance of shares to the sellers.

Acquisition

When Black Bear Medical's unaudited trailing 12-month figures are combined with PHM's annualized reported first quarter of 2015, PHM is expected to generate:

  • Over $48.5 million in annual run-rate revenue
  • Over $10.5 million in annual run-rate Adjusted EBITDA
  • Significant new organic growth cross-selling opportunities designed to generate additional revenue and profit growth

For over 20 years, the acquisition target company has served tens of thousands of patients in the states of Maine and New Hampshire. PHM expects to generate post acquisition organic growth from four strategies: (1) the acquisition is slated to give PHM additional locations and access to thousands of active patients with multiple chronic illnesses, resulting in cross-selling opportunities with PHM's existing cardiology services, pulmonology services and drug distribution services; (2) PHM plans to cross sell custom mobility services and products to its existing patients; (3) PHM plans to expand this compelling retail concept to existing PHM locations in much larger markets throughout South Carolina, California, Georgia and Florida; and (4) by acquiring patients in the 40-65 year age group through the retail stores, PHM also gains a clear advantage in keeping and serving the needs of these patients as chronic conditions emerge later in life.

Black Bear Medical generated more than $8.5 million in revenue for 2014 calendar year with just over $1 million in Adjusted EBITDA(1) over the same period, based upon unaudited due diligence.

Under the terms of the Definitive Purchase Agreement, PHM will acquire 100% of the stock of the Black Bear Medical entities for a total consideration of (1) $622,680 in cash to the sellers and (2) 7,072,472 shares of PHM issued to the sellers, subject to TSX approval. The Letter of Intent (LOI) was executed based on a term sheet offered when PHM's stock price was $0.57.

"There is an immediate and positive impact on our financial statements with this acquisition," said Michael Dalsin, Chairman of PHM. "While the acquisition will only be reflected in PHM's financial statements for the last two months of the current quarter, I expect there to be a significant impact on this quarter's financial results with the full force of revenue and profits being recorded in this year's fiscal third quarter."

"Black Bear Medical offers PHM access to a new market, the Northeast US," continued Mr. Dalsin. "This acquisition provides two interesting service lines that can be offered to our existing patient database - custom mobility and brick-and-mortar retail locations. PHM plans to expand this retail concept to the Southeast US. At the same time, this acquisition provides significant expansion opportunities for both of our pulmonology and cardiology service business units in the Maine and New Hampshire markets. David Hayes, and the executive team, plan to efficiently integrate the business into PHM and are focused on generating organic and cross-selling revenue immediately within the existing growing patient database."

"We do expect to close our LOI of a small pulmonology company in Georgia shortly as well. Our M&A team is nearing the LOI stage with at least two additional acquisition targets and I expect to have the next deal lined up shortly," Mr. Dalsin concluded.

About PHM

PHM is an acquisition-oriented, fast-growing and profitable company servicing patients with heart disease and other chronic health conditions. PHM is focused on acquiring companies in a highly fragmented and developing market of small privately-held companies servicing chronically ill patients with multiple disease states caused mainly by age and obesity. Because of the new and highly fragmented nature of the market, PHM is actively identifying and evaluating profitable, annuity-based companies to acquire at favorable prices for their patient databases and technical expertise. PHM's post-acquisition organic growth strategy is to increase annual revenue per patient by offering multiple services to the same patient, consolidating the patient's services and making life easier for the patient. The expected result is growing EPS with each acquisition and growing revenue and profits from the cross selling efforts.

Neither the 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.

(1) Adjusted EBITDA is defined as EBITDA not including stock based compensation.

Forward-Looking Statements

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of PHM and anticipated events or results, are assumptions based on beliefs of PHM's senior management as well as information currently available to it. While these assumptions were considered reasonable by PHM 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, difficulty integrating newly acquired businesses, 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 refers non-GAAP and non-IFRS financial measures that do not have standardized meaning prescribed by GAAP or IFRS. PHM's presentation of these financial measures may not be comparable to similarly titled measures used by other companies. These financial measures are intended to provide additional information to investors concerning PHM's performance.

Contact Information