Centric Health Acquires Specialty Pharmacy Operations in Grande Prairie and Medicine Hat, Alberta

Dec 22, 2016

– Strategic Acquisitions Immediately Accretive to Adjusted EBITDA* and EPS and Provide
Centric Health with Entry into Sizeable, Underserved Markets with Strong Growth Opportunities –

TORONTO, Dec. 22, 2016 /CNW/ - Centric Health Corporation ("Centric Health" or the "Company") (TSX:CHH) today announced that it has completed the acquisitions of three Specialty Pharmacy locations in Grande Prairie and Medicine Hat, Alberta, further strengthening the Company's presence in Alberta and its ability to serve regional and multi-province long-term care and retirement home customers. With these acquisitions, Centric Health's Pharmacy business now offers a network of 21 pharmacies, 17 of which are specialty pharmacy packaging fulfillment centres with mobile clinical pharmacy teams across four provinces. The three new pharmacy operations complement the Company's six existing operations in Alberta to provide Centric Health access to the vast majority of the province's seniors population and the opportunity to expand outside of Edmonton and Calgary, with a potential of servicing the 12,000 rural seniors community beds in the province.

In Grande Prairie, Alberta, the Company acquired 100% of the equity interests of Vic's Pharmacy Services Ltd. – the owner of two Specialty Pharmacy operations operating under the Guardian banner, which, in addition to providing retail and specialty clinical services, service approximately 550 beds in long-term care and retirement living homes and which have the potential to significantly increase their capacity in Northern Alberta.   

In Medicine Hat, Alberta in mid-November the Company also completed the acquisition of 100% of the equity interests of RPH.A.R. Consulting Inc., one of only three providers of long-term care and supportive living pharmacy services in the region.  This acquisition provided Centric Health with enhanced abilities to service beds in the Medicine Hat region, including recently announced, sizeable, multi-province contract awards.

Both of the transactions are immediately accretive to Adjusted EBITDA* and earnings per share.

"With these two strategic acquisitions, Centric Health now has a broad geographic spread of Specialty Pharmacy facilities and clinical pharmacy teams servicing long-term care and retirement homes across Canada," said David Cutler, President and Chief Executive Officer, Centric Health.  "They provide entries into two new, sizeable, underserviced local markets with limited competition and significant growth opportunities. Moreover, they further extend our ability to service regional and multi-province customers as they look to improve quality and safety by sourcing through a single-pharmacy-provider providing the latest medication management technology, reliable distribution, and standardization of policies and reporting."

Mr. Cutler continued, "Adding Centric Heath's Specialty Pharmacy infrastructure and know-how to the outstanding management of the acquired businesses - who will all continue on with their respective businesses - will further strengthen the value proposition of these successful operations while increasing clinical knowledge and operational capacity to expand margins as we grow our market share. With outstanding pharmacy teams and clinical expertise, the acquisitions support Centric Health's patient-first strategy, which is fully aligned with federal and provincial government priorities, as well as our goal to be recognized as the number one clinical team of any provider in the country."

These acquisitions, plus the previously completed acquisitions in 2016 of CareRx in British Columbia and Pharmacy West in Saskatchewan, are expected to add $2.7MM to Centric's annual EBITDA on a pro-forma basis, with a potential of $4.1MM if all the earn out targets are achieved.

Consideration and Payment – Grande Prairie

The Grande Prairie acquisition is being funded utilizing existing sources based on an independent Quality of Earnings Report for the trailing 12 months ending May 31, 2016 as follows:




Purchase Share

(# of shares
@ $1 per share1)


At Closing





January 31, 2018





Following December 31, 2018










  1. Warranted two-year EBITDA performance target (average of $1,152,500 p.a)
  2. Deferred cash / share payment
  3. If prior to December 31, 2019 the common shares of the Company do not trade at a volume weighted average share price equal to or higher than $1.00 for a defined period, the Company will make up the shortfall in cash or shares.
  4. Maximum performance consideration subject to achievement of warranted two-year EBITDA performance target

The Company also issued:

  • Outperform warrants to the vendors to purchase up to 400,000 Centric Health common shares based on the closing share price. One warrant will be exercisable for every $2 the actual EBITDA exceeds $2,305,000 during the two year period post-closing ending December 31, 2018.
  • Options to key management and staff to purchase Centric Health common shares pursuant to  Centric's Share Option Plan.

Consideration and Payment – Medicine Hat

The Medicine Hat acquisition was funded utilizing existing sources based on an independent Quality of Earnings Report for the trailing 12 months ending August 31, 2016 as follows:


EBITDA / EBITDA Performance

Cash Consideration

November 18, 2016



Within 10 days of Settlement of
Working Capital Statement 



November 18, 2017






  1. Subject to adjustment
  2. Warranted one-year EBITDA performance target.

The Company also issued options to key management and staff to purchase Centric Health common shares pursuant to Centric's Share Option Plan.

About the Grande Prairie Pharmacies

The pharmacies acquired in Grande Prairie are the oldest independent pharmacy practices in Grande Prairie and have served the health care needs of the Peace County for over 50 years. They provide a wide array of pharmacy care for community, retirement, long term care, and hospice patients on a daily basis.

The vendors of these pharmacies, Wilson Gemmill and Brad Willsey, are both prescribing pharmacists focused on innovation and clinical practice. They have both served on the Board of the Alberta College of Pharmacists (ACP), where Mr. Willsey served two terms as President. He is a past Queens MBA graduate and also a past associate professor at the University of Alberta's Faculty of Pharmacy Business Class. The strong management team reinforces Centric's strong human resource pipeline for recruiting and mentoring the brightest and best young talent from Universities and aligning itself with Government policy.

About the Medicine Hat Pharmacy

The prior owners of the recently acquired Medicine Hat pharmacy, Dan Reich and Allana Scott are both clinical prescribing pharmacists who have built a team that has worked within a multi-disciplinary environment, providing advanced clinical programs to manage clients with complex chronic diseases and retirement residents. Mr. Reich is one of Alberta's most credentialed clinical pharmacists with a Doctorate of Pharmacy degree, and is a certified geriatric pharmacist. He is frequently sought after to speak at conventions and conferences as a leader in Pharmacy, spreading Centric's brand and passion for clinical leadership within circles of pharmacy innovators and leaders.

About Centric Health

Centric Health's vision is to be Canada's most respected and recognized provider in the independent healthcare sectors in which it operates, world renowned for delivering the highest levels of quality care and outcomes, innovative solutions and value to patients, clients and stakeholders. To this end, Centric Health primarily focuses on two core healthcare businesses:

  • The Specialty Pharmacy division is a "Patient First" model composed of a growing national network of fulfilment centres that deliver high-volume solutions for the cost effective supply of chronic medication and other specialty clinical care services, serving more than 27,500 residents in over 330 seniors communities (long term care facilities, retirement homes and assisted living facilities) nationally. The Specialty Pharmacy division also provides pharmaceutical dispensing services for employees insured by corporate health plans.

  • The Surgical & Medical Centres division is Canada's largest independent surgical provider operating six facilities across four provinces. It serves a diversified customer base with private paid non-insured surgeries and diagnostics, government outsourcing of insured surgeries and diagnostics and other procedures funded by third-party payors (including Workers Compensation) and is the proud owner of Canada's first Centre of Excellence in Metabolic and Bariatric Surgery.

With national networks of facilities in each of its businesses, deep knowledge and experience of healthcare delivery and extensive, trusted relationships with payers, physicians, and government agencies, the Company is uniquely positioned to address current and future healthcare needs in growing markets as the Canadian healthcare industry goes through a major transformation over the medium to long term.


*Non-IFRS Measures: This press release includes certain measures which have not been prepared in accordance with IFRS such as EBITDA and adjusted EBITDA. This data is furnished to provide additional information and are non-IFRS measures and do not have any standardized meaning prescribed by IFRS.

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 the timing and completion of the proposed acquisition, final financial breakdown, 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, including the completion of the transactions on the terms set out in the definitive agreement and in a manner consistent with management's expectations, the accuracy of management's assessment of the effects of the acquisition, and the ongoing performance of the businesses of the Grande Prairie Pharmacies and the Medicine Hat Pharmacy. These assumptions and estimates are not intended to represent a complete list of the assumptions and estimates that could affect the Company. 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. The Company does not undertake to update any forward-looking information contained herein, except as required by applicable Canadian securities legislation.

SOURCE Centric Health Corporation

For further information: David Cutler, Chief Executive Officer, Centric Health Corporation, 416-619-9401, david.cutler@centrichealth.ca; Lawrence Chamberlain, Investor Relations, NATIONAL Equicom, 416-848-1457, lchamberlain@national.ca