Nova Leap Announces Execution of Definitive Agreement to Acquire Home Care Services Business in New England, U.S.
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
HALIFAX, March 19, 2018– NOVA LEAP HEALTH CORP. (TSXV: NLH) (“Nova Leap” or “the Company”), is pleased to announce that it has executed a definitive agreement (“the Agreement”) to acquire a home care services company (“the Target”) located in New England. The Target reported unaudited revenues of approximately $1.9 million and adjusted EBITDA of $0.315 million for the year ended December 31, 2017. All amounts are in United States dollars (“USD”) unless otherwise specified.
The acquisition is expected to be immediately accretive. Upon closing of the acquisition, which is targeted for early in the second quarter of calendar 2018, Nova Leap’s annual revenue run rate is expected to approach $9 million, an approximate 28% increase over current revenue run rate. Upon closing, Nova Leap is expected to approach 352,000 annualized recurring home care service hours, an approximate 25% increase from current levels.
Under the terms of the Agreement, the acquisition is to be made for total consideration of $1.2 million of which $1.0 million is payable with cash on closing and $0.2 million is by way of a promissory note repayable over a two-year period. Closing the acquisition will be subject to financing, final due diligence and TSX Venture Exchange approval. The Company expects to raise a combination of debt and equity to fund the transaction.
“We feel fortunate that we continue to attract very good opportunities in an area we want to support” said Chris Dobbin, President & CEO of Nova Leap. “This will be our second acquisition in New England this year and we expect to be profitable on a consolidated basis beginning in Q4 2018. We’ve come a long way in a short period of time, but we benefit from working with wonderful people throughout the region”.
About Nova Leap
The Home Care Providers industry is becoming one of the fastest growing healthcare industries in Canada and the United States. Home care saves patients billions of dollars every year by treating them in their own homes instead of in hospitals. An aging population, the prevalence of chronic disease, growing physician acceptance of home care, medical advancements and a movement toward cost-efficient treatment options from public and private payers have all fostered industry growth. Nova Leap is focused on a highly fragmented market of small privately-held companies providing patients one on one care in their homes. Nova Leap’s post-acquisition organic growth strategy is to increase annual revenue per location through a combination of increased employee investment, including training, focused sales and marketing efforts, billing rate increases, expansion of geographical coverage, and improved referral sources.
FORWARD LOOKING INFORMATION:
Certain information in this press release may contain forward-looking statements, such as statements regarding the increase in the Company’s recurring client service hours, annualized recurring revenue and progress on integrating previous acquisitions. This information is based on current expectations and assumptions, including assumptions concerning the Company’s ability to integrate its acquired businesses and maintain previously achieved service hour and revenue levels, that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Risks that could cause results to differ from those stated in the forward-looking statements in this release include regulatory changes affecting the home care industry, unexpected increases in operating costs and competition from other service providers. All forward-looking statements, including any financial outlook or future-oriented financial information, contained in this press release are made as of the date of this release and included for the purpose of providing information about management’s current expectations and plans relating to the future. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in the Company’s filings with the Canadian securities regulators, which filings are available at www.sedar.com.
For further information:
Christopher Dobbin, CPA, CA,
Director, President and CEO Nova Leap Health Corp.,
T: 902 401 9480 F: 902 482 5177
Vice President Renmark Financial Communications Inc.
T: 416 644-2020 or 514 939-3989
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.