TORONTO, Aug. 12, 2019 /CNW/ - Centric Health Corporation ("Centric Health" or the "Company") (TSX:CHH) today announced that it has entered into a definitive agreement to sell its Surgical and Medical Centres business to the Kensington Private Equity Fund and its manager, Kensington Capital Advisors Inc. ("Kensington") for a cash purchase price of $35 million. The transaction is expected to close on or about September 30, 2019, subject to satisfying customary closing conditions, including the receipt of applicable regulatory and other third party approvals. Centric Health expects to use the net proceeds from the sale to repay a portion of its outstanding credit facilities and for working capital purposes.
"This transaction represents a meaningful step towards deleveraging our balance sheet and better positions us to execute on our vision to become the leading provider of pharmacy and other healthcare services to Canadian seniors," said David Murphy, President and Chief Executive Officer of Centric Health. "During the past year, we have successfully re-engineered operations, accelerated growth and created momentum in our core business, and divested non-core assets in order to increase our financial flexibility to capitalize on organic and inorganic opportunities."
"Our plan is to work with the Surgical and Medical Centre team to deliver high quality patient care as well as build meaningful relationships and partnerships in the healthcare community," said Kirk Hamilton, Senior Vice President at Kensington. "We believe this acquisition represents a great opportunity to work together with all stakeholders in Canadian healthcare."
Centric Health received financial advice from Origin Merchant Partners and Scotia Capital Inc. and legal advice from Stikeman Elliott LLP. Kensington received legal advice from Bennett Jones LLP.
Centric Health had previously classified its Surgical and Medical Centres segment as assets held for sale and presented its current and prior year results as discontinued operations.
Centric Health expects to report its second quarter 2019 financial results via news release after markets close on August 14, 2019 and has scheduled a conference call presentation for August 15, 2019, at which time it will further discuss the transaction.
ABOUT CENTRIC HEALTH
Centric Health's vision is to be the leading provider of pharmacy and other healthcare services to Canadian seniors. Centric Health is one of Canada's leading, and most trusted providers of comprehensive Specialty Pharmacy services and solutions to seniors. Centric Health operates a large national network of pharmacy fulfilment centres that deliver high-volume solutions for the cost-effective supply of chronic medication and other specialty clinical pharmacy services, serving more than 31,000 residents in over 450 seniors communities (long-term care, retirement homes, and assisted living facilities) nationally.
With services that address the growing demand within the Canadian healthcare system, Centric Health's unparalleled national care delivery platform provides significant potential for future expansion and growth.
Kensington is a leading independent Canadian investor in alternative assets. Founded in 1996, and with over $1.5 billion invested in private equity, venture capital, and alternative assets. Kensington's active management approach and relationship-based business has generated top quartile returns for investors. For more information about Kensington, please visit http://www.kcpl.ca.
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 Company's business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events, including expectations regarding the closing of the transaction. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate" or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management.
Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements. Factors that could cause such differences include the Company's liquidity and capital requirements, government regulation and funding, the highly competitive nature of the Company's industry, reliance on contracts with key customers and other risk factors described from time to time in the reports and disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements and neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The factors underlying current expectations are dynamic and subject to change.
SOURCE Centric Health Corporation
For further information: Media Contacts: Centric Health Corporation, David Murphy, President and Chief Executive Officer, Centric Health Corporation, 416-927-8400; Andrew Mok, Interim Chief Financial Officer, Centric Health Corporation, 416-927-8400; Kensington Capital Partners, Jodi Echakowitz, Boulevard Public Relations, 416-271-7250, Jodi@boulevardpr.com