Well Health Technologies (TSX: WELL) this morning continued with its strategy of acquiring medical-related assets, with its latest target being that of CRH Medical Corporation (TSX: CRH) (NYSE: CRHM). The company this morning announced the acquisition of the publicly listed firm for total consideration of US$369.2 million, which is inclusive of an outstanding credit facility.
The acquisition will see Well Health add to its portfolio a total of 69 ambulatory surgery centers and gastroenterologist clinics across 13 US states. Upon closing, the subsidiary will become the seventh business unit of the company, and will continue to operate autonomously lead by its current chairman and CEO Dr Tushar Ramani.
Furthermore, the acquisition will add a revenue run-rate of US$120 million to Well’s books. CRH currently has an EBITDA operating margin of 40%, as well as 25% free cash flow margins.
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Under the terms of the transaction, current shareholders are to receive US$4.00 per share in cash, with equity consideration amounting to a total of US$292.7 million.
To fund the transaction, Well Health is to conduct an equity offering of subscription receipts valued at $295.5 million, which is to take place at a price of $9.80 per share. Commitments have been received by a group of institutional and individual investors to raise such funds. The offering is expected to close in mid February.
Furthermore, there is currently US$76.5 million of debt owing by CRH under a US$200 million line of credit. This debt will be replaced by Well, with commitments already in place from CIBC as well as HSBC Bank Canada.
The transaction is expected to be completed in Q2 2021, subject to the approval of CRH shareholders as well as court and regulatory approvals.
Well Health last traded at $8.01 on the TSX.
Information for this briefing was found via Sedar and WELL Health Technologies Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
