Kovo HealthTech Corporation (TSX-V: KOVO) announced that it has entered into a Membership Interest Purchase Agreement (MIPA) to acquire E&A Medical Billing Service and Software for US$2.7 million in cash.

The healthcare technology company said the acquisition, its 11th, is expected to be immediately accretive, as E&A recorded Trailing Twelve Month (TTM) revenues of US$3.3 million with earnings before interest, taxes, depreciation and amortization (EBITDA) margins of approximately 25% net of synergies.

'The well-established Arizona-based business meets Kovo's previously disclosed acquisition strategy which targets buying $1 of Annual Recurring Revenue (ARR) for every $1 investment of debt or equity and is anticipated to deliver immediate, accretive growth,' Kovo HealthTech CEO Greg Noble said in a statement.

Kovo noted it has not assumed any long-term debt.

The company added that the acquisition is the first to be financed under its new debt facility of US$7 million, which closed on April 20, 2023, and still provides Kovo with room to grow through future acquisitions.

E&A Medical is an Arizona-based medical billing specialist firm that has been in business for more than 40 years, according to the company.

Completion of the acquisition is subject to the satisfaction of a number of closing conditions, including receipt of the approval of the TSX Venture exchange.

Kovo HealthTech is a growing healthcare technology company specializing in Billing-as-a-Service offering SaaS-style recurring revenue contracts and software for more than 1700 US healthcare providers.

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