Protech Home Medical

  • Simplifying the Patient Experience!

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PROTECH ANNOUNCES EXECUTION OF AN LOI TO ACQUIRE A PROFITABLE BUSINESS IN THE NORTHEASTERN U.S.

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

Cincinnati, Ohio – April 17, 2019 – Protech Home Medical Corp. (“Protech” or the “Company”) (TSXV: PTQ), a healthcare services company with operations in the United States, is pleased to announce that it has executed a non-binding letter of intent (LOI) to acquire a private company in the Northeastern United States. reporting unaudited trailing 12 month annual revenues of approximately C$4 million and positive EBITDA.

Acquisition Details

The target company is a leader in the respiratory home care services industry in the Northeastern United States. It currently has four locations and, with this acquisition, Protech will further expand its geographical footprint to provide more services in the United States. According to the LOI, Protech expects to close the acquisition with a mix of cash and stock. The acquisition is being made at a reasonable multiple and is EBITDA accretive. Closing of the acquisition is subject to final due diligence, negotiation and execution of a definitive purchase agreement and all necessary approvals, which is anticipated to be within the next 30 days.

The acquisition is expected to increase Protech’s annual revenues by approximately C$4 million. When combined with existing operations, Protech expects its annualized run-rate revenue to exceed C$90 million before any expected additional revenue generated from organic growth, cross selling and corporate synergies.

“This type of company is an example of the strategic acquisitions we’re going to continue to pursue," said Greg Crawford, Chairman and CEO of Protech. "The acquisition is immediately accretive, increasing revenue and EBITDA as we use our regional expertise and infrastructure to achieve profit growth through our integration platform. These types of acquisitions are an effective way to increase market penetration in our existing markets and will continue to be one of the core strategies to augment our growth. We are particularly delighted by the target’s product mix, largely focused on the respiratory market, which we have a particular affinity towards given its extremely positive market fundamentals.”

M&A Pipeline Update

As previously announced, the Company is focused on the implementation of a corporate strategy that incorporates technology, organic growth and strategic acquisitions to continue to improve upon its recent financial results. Post acquisition, the Company will have more than C$5 million in cash to continue to pursue additional acquisitions. The potential acquisitions will strategically focus on geographic locations driven by product mix, distribution volumes as well as the ability to consolidate distribution channels to drive operating efficiencies and maximize earnings accretion.

“We continue to build our pipeline of qualified acquisition targets,” said Hardik Mehta, CFO of Protech. “In addition to this LOI, we are also in the final stages of signing an LOI with a company generating
significant revenue. While the deal terms have been agreed upon, we are awaiting final approvals on the seller side. Additionally, we have a pipeline of several companies with which we are in active negotiations, and we continue to execute NDAs with new potential targets. These targets have combined revenue of more than C$40 million. With many excellent acquisition targets to choose from, we will continue to be extremely disciplined about the acquisitions we pursue and focus on those where we can achieve favorable pricing and optimal accretion.”



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PHM Admin