Centric Health Announces Closing of $25 Million Bought Deal of Convertible Note Offering

Sep 21, 2012


TORONTO, Sept. 21, 2012 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH), Canada's leading diversified healthcare services company, today announced it has closed its previously announced bought deal offering of $25.0 million principal amount of convertible unsecured subordinated notes (the "Notes") at a price of $1,000 per Note (the "Offering"). The Offering was made pursuant to a shelf prospectus supplement dated September 14, 2012 to the Company's base shelf prospectus filed on October 21, 2011. The Company sold 25,000 Notes for gross proceeds of $25.0 million ($23.4 million net of fees and expenses) on a bought deal basis to a syndicate of underwriters led by National Bank Financial Inc. (the "Underwriters"). The Notes issued under this Offering will be listed on the TSX under the symbol CHH.NT and will commence trading today.

The Company has granted the Underwriters an over-allotment option to purchase up to an additional $3.75 million of Notes at the same price, exercisable in whole or in part for a period of 30 days following closing, to cover over-allotments. If the over-allotment option is exercised in full, the total gross proceeds to Centric Health from the sale of Notes will be $28.75 million. The Company intends to use the net proceeds from the Offering for future acquisitions, including the previously announced agreement to acquire certain assets of Shouldice Hospital Limited, a well-known independent hospital focused exclusively on abdominal hernia repair, to reduce indebtedness and for general corporate purposes.

"The successful completion of this offering has further strengthened our capital position while providing support for our future growth," said Peter Walkey, Chief Financial Officer of Centric Health.

The Notes will bear interest from the date of issue at 6.75% per annum, payable semi-annually in arrears on October 31 and April 30 each year commencing April 30, 2013. The Notes will have a maturity date of October 31, 2017 (the "Maturity Date").

The Notes will be convertible at the holder's option at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date specified by the Company for redemption of the Notes into common shares at a conversion price ("Conversion Price") of $1.12 per common share, being a conversion rate of 892.8571 common shares for each $1,000 principal amount of Notes. The Conversion Price represents a premium of 41.7% over the share price of $0.79 on September 13, 2012, which is the date immediately preceding the date the prospectus supplement was filed with securities regulatory authorities. The Notes are not redeemable prior to October 31, 2015. On and after October 31, 2015 and prior to October 31, 2016 the Notes are redeemable at par provided that market price for Centric shares prior to the date of notice of redemption is not less than 125% of the Conversion Price. On and after October 31, 2016, the Notes will be redeemable at par. Upon conversion, in lieu of shares, the Company may elect to pay the holder in cash. In addition, subject to any required regulatory approval, the Company has the option to satisfy its obligation to repay the principal amount of the Notes on redemption or maturity in freely tradable shares (based on 95% of the market price on the date of redemption or maturity). In certain circumstances where a holder elects to convert Notes in connection with a change of control prior to maturity, the holder may be entitled to receive additional shares as a make-whole premium.

Conditional regulatory approval was received from the TSX on September 14, 2012.  All other closing conditions have been satisfied.

For further information please refer to the Company's complete filings at www.sedar.com.

No securities regulatory authority has either approved or disapproved of the contents of this news release. The securities being offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the ''U.S. Securities Act''), or any state securities laws, and may not be offered or sold in the United States unless pursuant to an exemption there from. This press release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of Centric Health in any jurisdiction.

About Centric Health

Centric Health's vision is to be Canada's premier healthcare company, providing innovative solutions centered on patients and healthcare professionals. As a diversified healthcare company with investments in several niche service areas, Centric Health currently has operations in medical assessments, disability and rehabilitation management, physiotherapy and surgical centres, homecare, specialty pharmacy, wellness and prevention and home medical equipment. With knowledge and experience of healthcare delivery in international markets and extensive and trusted relationships with payers, physicians, and government agencies, Centric Health is pursuing expansion opportunities into other healthcare sectors to create value for all stakeholders through an unwavering commitment to the highest quality of care. Centric Health's common shares are listed on the TSX under the symbol CHH, and Centric Health's Notes issued under this Offering will be listed on the TSX under the symbol CHH.NT. For further information, please visit www.centrichealth.ca and www.lifemark.ca. Centric Health's strategic advisor is Global Healthcare Investments & Solutions ("GHIS") (www.ghis.us). GHIS and entities controlled by shareholders of GHIS are currently the largest shareholders of Centric Health.

This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. These forward-looking statements include, among others, statements regarding business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Centric Health and described in the forward-looking statements contained in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits Centric Health will derive there-from.

SOURCE: Centric Health Corporation

For further information:

Peter Walkey
Chief Financial Officer
Centric Health

Lawrence Chamberlain
Investor Relations
TMX Equicom
416-815-0700 ext. 257