PHM Announces Execution of Letter of Intent (LOI) to Acquire a Large Regional Business in Colorado with $16.5 Million in Revenue; $4 Million in Adjusted EBITDA; Provides Updated M&A Pipeline

LOS ANGELES, CALIFORNIA--(Marketwired - March 5, 2015) -

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Patient Home Monitoring (PHM) (TSX VENTURE:PHM), a profitable company with annualized revenues exceeding $50 million focused on rolling-up annuity-based healthcare service companies in the U.S. and Canada, announced it has executed a non-binding Letter of Intent (LOI) to acquire a company in Colorado reporting unaudited trailing 12 month annual revenues of approximately $16,500,000 and Adjusted EBITDA of approximately $4,000,000.

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

The Letter of Intent (LOI)

The Colorado business is a large, regionally focused company offering home-based medical equipment and services for patients with chronic pulmonary conditions. The Company has more than 50,000 active patients in their database and an even larger total database of patients PHM could potentially cross-sell new services and products. The two seasoned leaders of the Company will be staying on with PHM after the transaction as senior executives and will receive a portion of their consideration in stock. After close, PHM plans to start immediately cross-selling these services across Georgia, Florida, New Hampshire, Maine, South Carolina, and, when closed, Virginia, Oklahoma and Texas.

According to the LOI, PHM will acquire the business for a total consideration of approximately $22 million. PHM has sufficient cash on the balance sheet to complete the acquisition. Closing the acquisition will be subject to final due diligence and a binding purchase agreement.

The M&A Pipeline Update

PHM has issued Letters of Intent (LOIs) or term sheets to 12 companies with combined annual revenues in excess of $141 million.

• LOIs: PHM has executed Letters of Intent to acquire companies with an aggregate of over $31 million in revenue (including today's announcement). All executed LOIs are expected to close.
• Term Sheets: PHM has issued term sheets and is negotiating final pricing with 7 companies with an aggregate of over $110 million in additional revenue. Not all term sheets are expected to close.
• NDAs: PHM has signed non-disclosure agreements (NDAs) with 40 companies in the first 2 months of 2015. PHM is reviewing the financial information of these businesses, as well as their market position, patient database and product offering. If qualified, PHM plans to initiate term sheet negotiations with several of these business in the near future. Executed NDAs are a first step to understand whether an acquisition target is qualified and is an indicator management uses to measure the acquisition pipeline.

"This is a significant acquisition for PHM and a major step toward our 2015 goal of achieving $100 million in annual revenue. Assuming we close all of the outstanding LOIs PHM will be an $81 million run rate revenue company," said Michael Dalsin, Chairman of the Board for PHM. "We are poised to acquire a dominant business in the Colorado market with significant revenue, EBITDA, and perhaps most importantly, a large and untapped patient database. Along with this acquisition, we get two proven senior executives."

"When closed, this acquisition will be immediately EPS accretive, expected to increase run rate EBITDA by more than 35% before organic growth," continued Mr. Dalsin. "Once closed, this acquisition coupled with the Virginia company and the Oklahoma and Texas companies, PHM's annual run-rate revenue will exceed $81 million per year. We will be working diligently to close all of these deals quickly. We continue to build our pipeline of potential deals and I am confident we can keep up the pace of closing two acquisitions per quarter for the rest of this year."

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.