Patient Home Monitoring Corp.
TSX VENTURE : PHM

June 23, 2015 09:00 ET

PHM Announces Execution of a Letter of Intent (LOI) With an Additional Regional Business in the Midwest With $18.5 Million in Annualized Revenue and $6.5 Million in Annualized Adjusted EBITDA

LOS ANGELES, CALIFORNIA--(Marketwired - June 23, 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 (PHM) (TSX VENTURE:PHM), a profitable company with annualized run-rate revenues of $115,000,000 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 regional company in the Midwest United States with a large patient database and management-adjusted unaudited annualized revenues in excess of $18,500,000 and Annualized Adjusted EBITDA in excess of $6,000,000.

This regional business has achieved year-over-year revenue growth in excess of 50% providing home based respiratory products and services in several states across the Midwest United States. The business has a substantial amount of active patients that PHM could potentially cross-sell new services and products. After closing, PHM plans to start immediately cross-selling its existing service lines across all of the acquired locations.

According to the LOI, PHM will acquire the business for a total consideration of approximately $24 million. Closing of the acquisition will be subject to final due diligence and a binding purchase agreement.

"We continue to build M&A pipeline in midsized deals," said Michael Dalsin, Chairman of the Board for PHM. "Once all of the LOIs in the pipeline are closed, PHM's run-rate revenue will exceed $175 million per year. I expect the team will close this LOI, along with the other outstanding LOIs very soon."

"This acquisition is much like the acquisition of Sleep Management," continued Mr. Dalsin. "Both companies have shown a track record for significant revenue growth in their markets. With these two deals, PHM looks to benefit not only from inorganic growth, and cross-selling growth, but also significant organic growth in the years to come."

"Assuming we close all of the outstanding LOIs, PHM will be about a $175 million run rate revenue company with more than $44 million in run rate Adjusted EBITDA meeting our exit revenue run rate goal for 2015 of $175 million."

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.

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