PHM Announces Execution of Final Binding Purchase Agreement to Acquire Kentucky-Based Legacy Oxygen, a Business With $3.5 Million in Annualized Revenue and $750,000 in EBITDA

LOS ANGELES, CALIFORNIA--(Marketwired - May 7, 2015) -

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Patient Home Monitoring (PHM) (TSX VENTURE:PHM), a profitable company with annualized revenues exceeding $65 million focused on rolling-up annuity-based healthcare service companies in the U.S. and Canada, announced it has executed a final, binding purchase agreement to acquire Legacy Oxygen, a company in Kentucky with management-adjusted unaudited trailing 12-month annual revenues of approximately $3,500,000 and Adjusted EBITDA of approximately $750,000.

PHM also provided updated details of its pipeline of small acquisition targets.

Acquisition Details

Legacy Oxygen is a small regionally focused company offering home-based medical equipment and services for patients with chronic pulmonary conditions across multiple locations in Kentucky. The three owners of the Company will be staying on with PHM after the transaction and will receive a portion of their consideration in stock. After close, PHM plans to start immediately cross-selling its existing services into the Kentucky locations.

This acquisition is expected to immediately increase PHM's annual run rate revenue to more than $65 million in revenue and more than $12 million in Adjusted EBITDA.

Terms of the Acquisition

According to the Purchase Agreement, PHM will acquire the business for a mix of cash and stock. PHM will pay $1.65 million in cash and issue 1,708,086 shares, or less than 1% of PHM's total outstanding common shares. This acquisition is expected to increase PHM's revenues by more than 5% and EBITDA by more than 5% before any organic growth from potential cross-selling opportunities.

The M&A Pipeline Update on Small Acquisition Targets

PHM plans to continue to source and close large deals.

And, as previously announced, PHM is additionally pursuing small regional acquisition targets in the $3M to $8M revenue range that PHM can close quickly and concurrently with the larger deals under LOI. By closing several small acquisitions per quarter, PHM can obtain significant inorganic revenue annually. Additionally, these smaller acquisitions expand PHM's national geographic footprint and number of locations to cross-sell new service lines. The first acquisition in this category was West Home Health in March, which expanded PHM into the Virginia market. PHM currently has an additional small acquisition target under LOI in Oklahoma, expected to close soon.

"Acquiring small regional businesses continues to augment our acquisition and growth strategy," said Michael Dalsin, Chairman of the Board of PHM. "With this acquisition, PHM has closed three acquisition targets in this calendar year with annualized revenue exceeding $17 million. We are working toward closing the acquisition targets under LOI and continue to build the acquisition pipeline for both large and small deals."

About PHM

The explosive growth in the number of elderly patients in the US healthcare market is creating pressure to provide more efficient delivery systems. Healthcare providers, such as hospitals, physicians and pharmacies, are seeking partners that can offer a range of products and services that improve outcomes, reduce hospital readmissions, and help control costs. PHM fills this need by delivering a growing number of specialized products and services to achieve these goals. PHM is a positive cash flow and profitable company that serves patients with heart disease and other chronic health conditions, this operation is a platform for acquisitions and organic growth. PHM is focused on 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 working to identify and evaluate profitable, annuity-based companies to acquire their patient databases and technical expertise at favorable prices. 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.

These 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 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.

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, low profit market segments as well as general economic, market and business conditions, and could differ materially from what is currently expected.

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.

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 PHM. The securities of PHM 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.