SKYLIGHT HEALTH GROUP INC. - Skylight Health to acquire US-based Healthcare Group which operates a network of over 6 primary and urgent care centers.
- 2020 unaudited revenue of over $20 million and $3 million EBITDA.
- Immediately accretive deal strengthens organizational team with a robust, centralized corporate infrastructure for national network.
- Skylight Health forecasted annual revenue run rate now over $45 million and EBITDA run rate of $5.5 million after closing of the transaction.
- Transaction expected to close Q1 2021.
TORONTO, ON - January 7, 2021 - Skylight Health Group Inc (TSXV:SHG; OTCQX: SHGFF) ('Skylight Health', 'SHG' or the 'Company'), one of the largest multi-specialty healthcare systems in the United States, is pleased to announce that it has entered into a Binding Letter of Intent (LOI) (the 'Transaction), signed on January 6, 2021 to purchase 100% of the shares of a US Primary and Urgent Care clinic group (the 'Clinic') in an arms-length acquisition. For confidentiality reasons, the name and location of the group will remain undisclosed until the closing of the Transaction before the end of Q1 2021. The planned acquisition of the Clinic expands the Company's bricks and mortar and telemedicine services within one of the existing Skylight Health states.
The Clinic has been operating an established and fast-growing network of primary care clinics. The group is actively credentialed with major insurance carriers. Aligned with SHG's multi-disciplinary strategy, the Clinic employs a multi-disciplinary approach to patient care management. The Clinic has been successful in servicing Regional Health Systems with pre & post acute care, reducing emergency room visits and readmissions within the communities it serves. The Clinic's clinical staff mix includes physicians, nurse practitioners, and physician assistants.
The Clinic adds immediate incremental revenue to SHG as it strengthens its market share within an existing state, as well as builds upon the infrastructure to support SHG's national network of clinics and further growth. The Clinic has built a sustainable and scalable corporate infrastructure including in-house revenue cycle management, credentialing, centralized scheduling, compliance, and medical leadership. SHG expects continuity of its leadership team and clinical staff post-acquisition.
Prad Sekar, CEO, Skylight Health said, 'This is an exciting acquisition for SHG. Not only does this further strengthen our position in the US market to bring a one-stop shop approach to care for patients, but significantly reinforces our corporate infrastructure to further scale across other US markets. We have highlighted several transactions of material size throughout 2020 and we are glad to begin executing against this pipeline. With each acquisition, we enhance and strengthen our team to continue to build value for patients and drive fundamental business growth.'
As per terms of the binding LOI, the Company will purchase 100% of the shares of the Clinic for $14.3 million, representing a 4.7x EBITDA multiple. The structure of the deal will include 40% cash ($5.7 million) from the Company and a 3-years seller's note for the remaining 60% ($8.58 million) at an 8% interest rate. SHG at its option may, at any time, repay the Note in part or in full prior to the end of the Term without penalty. If SHG retires the Note earlier than the Term, no further payments will be required or incurred by SHG. On an unaudited basis, the Clinic is expected to generate over $20 million in annual revenue and $3 million in EBITDA. This transaction is subject to a satisfactory due diligence period by the Company and mutual agreement to a Share Purchase Agreement and Closing Conditions and subject to regulatory and Board approval. The transaction is expected to close by the end of Q1 2021.
- Next PostSkylight Announces Voluntary Lock-Up Agreements Begins Trading on TSXV
Attachments
- Original document
- Permalink
Disclaimer
Skylight Health Group Inc. published this content on 07 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 January 2021 12:11:08 UTC
