Canadian mid-market private equity firm Birch Hill Equity Partners has agreed to purchase the retail home medical operations of Centric Health Corp for $50 million. The deal is expected to close in August. Doing business under the brand names MEDIchair and Motion Specialties, the operations to be acquired focus on the sale of home accessibility equipment, mobility devices and home medical supplies through a network of 47 franchised and 30 corporate stores. Birch Hill partner Thecla Sweeney said the firm will help position MEDIchair and Motion “to thrive in a fast growing industry.” Based in Toronto, Birch Hill has $2 billion in capital under management.
Centric Health Divests MEDIchair and Motion Specialties Retail Home Medical Operations to Birch Hill Equity Partners for $50 Million
TORONTO, Jun 23, 2014 (Canada NewsWire via COMTEX) — – Centric Health sharpens focus on high margin healthcare services businesses, driving sustainable long-term value and growth – Centric Health Corporation (“Centric Health” or “the Company”) (TSX: CHH), Canada’s leading diversified healthcare company, today announced that it has entered into a definitive agreement to sell its MEDIchair and Motion Specialties retail home medical operations to Canadian-based Birch Hill Equity Partners (“Birch Hill”) for $50 million.
“Divesting our MEDIchair and Motion Specialties operations achieves two important strategic objectives for our company,” said David Cutler, President and Chief Executive Officer. “First, it sharpens our focus on our core strengths as a healthcare services provider, offering Canadians greater access to a broad portfolio of high quality care solutions to meet growing needs. Proceeds from the sale will enable us to invest in new high margin opportunities consistent with this focus that will maximize the long-term profitability of our platform. Second, it provides us with additional flexibility as we move forward in our debt reduction strategy.”
The sale represents the first step in the Company’s strategic repositioning to focus on healthcare services businesses with low working capital requirements and low reliance on government funding and a national footprint to generate consistent, sustainable growth and shareholder value over the long term. The Company will host an Investor Day event to discuss its strategic direction with updates from business leaders on key initiatives on Tuesday, June 24(th) in Toronto (see below for details).
Mr. Cutler added, “The transition to Birch Hill provides both employees and franchisees with new opportunities and resources to allow these businesses to realize their full potential.”
Thecla Sweeney, partner at Birch Hill, said, “MEDIchair and Motion are two of Canada’s leading health care brands; they are home to some of the industry’s most experienced, knowledgeable, and passionate people, all with deep relationships in the communities they serve. We believe that working together, with not just management, but also the sales reps, store managers, franchisees and other staff, we can position MEDIchair and Motion to thrive in a fast growing industry.”
The sale is subject to certain regulatory approvals, including approval by Canada’s Competition Bureau, as well as customary closing conditions, and is expected to close immediately following receipt of all regulatory approvals, which are anticipated by no later than mid-August of this year.
The retail home medical operations specialize in the sale of home accessibility equipment, mobility devices and home medical supplies through a network of 47 franchised and 30 corporate stores, operating under the MEDIchair and Motion Specialties banners.
The sale does not include Performance Medical Group, which offers state-of-the-art custom orthotics, off-the-shelf orthotics, custom bracing, and laser and shockwave therapy at 50 locations across Canada and through Centric Health’s physiotherapy clinic network.
Centric Health Investor Day Details
Centric Health will host its 2014 Investor Day on Tuesday, June 24(th) from 9:00 a.m. to 11:00 a.m. at St. Andrew’s Club in Toronto. To register, email Danielle Babineau at firstname.lastname@example.org.
For those unable to attend the event in person, a live webcast will be available on the Centric Health web site at http://www.centrichealth.ca/investors/events-and-presentations.
About Birch Hill Equity Partners
With $2 billion in capital under management, 20 partner companies and 31 fully realized investments since 1994, Birch Hill is the leader in long-term value creation in the Canadian mid-market. As a group, Birch Hill’s partner companies represent one of Canada’s largest corporate entities with over $4.7 billion in total revenue and more than 28,000 employees. For more information about Birch Hill Equity Partners, please visit www.birchhillequity.com.
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 and wellness and prevention. 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 with an unwavering commitment to the highest quality of care. Centric Health is listed on the TSX under the symbol CHH. For further information, please visit www.centrichealth.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 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
Daniel Gagnon Chief Financial Officer Centric Health; 416-619-9417;email@example.com
Lawrence Chamberlain Investor Relations TMX Equicom; 416-815-0700 ext. 257; firstname.lastname@example.org
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