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Centric Health to acquire RHI
Posted on Tuesday, 24 March 2020 14:34
Centric Health has signed off on a deal to buy Canada-based Remedy Holdings (RHI) and its Remedy'sRx Specialty Pharmacy business for CAD 44.00 million (USD 30.41 million).
The purchase price includes an upfront sum of CAD 31.00 million in cash and shares, as well as a deferred consideration of CAD 8.00 million.
Furthermore, the deal comprises an earnout of up to CAD 5.00 million in cash, dependent on certain performance-based targets being achieved over the next two years.
Centric Health plans to finance the transaction through its existing senior and subordinated credit facilities.
The deal also includes a pending acquisition by RHI, through which the group will contribute an additional 800 beds serviced.
Completion is slated to take place during the second quarter of 2020, subject to customary closing conditions, as well as regulatory and shareholder approval.
Founded in 1950, RHI sells prescription and proprietary drugs and non-prescription medicines to customers across the US.
During the financial year ended 30th September 2019, the company generated revenue of around CAD 60.00 million.
Its Remedy’sRX division offers medication management services to more than 18,500 residents in over 400 long term care, assisted living, independent living, retirement and group homes.
It also caters to mental health facilities, hostels and hospices, among others.
The group operates 13 pharmacies in Ontario, Alberta and British Columbia.
Remedy’sRX technology includes PolicyManager, a cloud-based management software platform which allows clients to access pharmacy policies and procedures.
Upon closing, Centric Health will become Canada’s leading provider of specialty pharmacy services to senior communities, serving over 50,000 residents across the country.
David Murphy, chief executive of the buyer, said: “In addition to strengthening our existing national platform, this transaction will create opportunities to realise material synergies and generate substantial shareholder value as we integrate the businesses.”
If the acquisition does not close, a termination fee may be payable by Centric Health in cash or common shares.
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