Centric Health Corporation (TSX: CHH) has entered into an asset purchase agreement to acquire Salus Pharmacare, a Calgary based specialty pharmacy for up to $4.375 million.
The transaction is expected to close on or about November 15, 2017.
Total consideration on closing is $2.075 million consisting of $1.4 million in cash and 613,636 shares with price protection of $1.10 per share. Additional consideration consists of up to $2.3 million in cash and shares based on the achievement of certain performance benchmarks over the next three years.
Salus Pharmacare presently serves over 700 assisted living beds with potential to service another 700 seniors in independent living facilities. Its operation will be merged with one of Centric’s existing operations in Calgary. The acquisition will increase Centric’s market share in Calgary and makes it a leading pharmacy provider to assisted living and long-term care homes in Alberta.
With this acquisition, Centric Health’s pharmacy business will add efficiency to its network of 20 pharmacies, 17 of which are specialty pharmacy packaging fulfillment centres with mobile clinical pharmacy teams across four provinces— the largest specialty pharmacy network in Canada.
“This is an important acquisition that allows us to continue to build scale and is aligned with our strategy to grow in Western Canada,” said David Cutler, President and Chief Executive Officer, Centric Health. “To further solidify our presence in Calgary and our ability to win further contracts, we intend to combine Salus’ operations with our Pharmacare team in a new larger facility, which we expect will generate synergies and position us to meet expected growth in the market.”
Salus had trailing 12-month Adjusted EBITDA of $0.6 million. This transaction will be immediately accretive to Adjusted EBITDA, and will provide additional growth opportunities through the realization of scale and synergies in the merged facility.
photo credit: Centric Health