Continental Home Healthcare Acquires Carepoint Health Services Inc.
Glendale, California
Continental Home Healthcare Ltd. announced today that it has successfully completed the acquisition of all the assets of CarePoint Health Services Inc. of Van Nuys, California. CarePoint is a home medical equipment business with assets of US$3.3 million and annual revenues of US$3.4 million.
The total cost of the acquisition is US$2.3 million. The terms of payment include (i) a promissory note for US$400,000 bearing annual interest of 10%, with interest only payable for six months and the entire principal due six months from closing, (ii) a second promissory note for US$400,000 bearing annual interest of 8% with interest only payable for 24 months and the principal paid in January 2003, (iii) the assumption of US$1.5 million in accounts payable and equipment leases with terms ranging from six months to four years. The transaction terms accommodate the seller who is moving to another sector of the health care industry.
CarePoint Health Services is one of southern California's leading home medical equipment companies and Continental had considered them one it's strongest competitors. They enjoy a large patient base resulting from their preferred provider contract with the U.C.L.A. Medical Center, one of Los Angeles' largest medical facilities. CarePoint derives a significant percentage of its revenues from the high margin rental and respiratory product revenue sectors, areas that match perfectly with Continental's preferred acquisition criteria.
Robert Thornton, President and C.E.O. said that with CarePoint's substantial operational base and the minimal up front costs to acquire the company, this acquisition will be immediately accretive to earnings per share. The economies of scale from an administrative standpoint as well as the anticipated short integration period will also benefit the Company. Continental is enthusiastic about assuming CarePoint's skilled employee base of 30 to ensure a smooth transition period and to provide continuity and superior customer service for the patients, he added.
Continental has experienced tremendous growth during the last three years. The Company is currently renovating new space to accommodate its rapid internal growth and the integration of the CarePoint employees and is actively seeking additional acquisition opportunities to fuel its continued success.
Continental Home Healthcare Ltd. acquires, consolidates, and manages healthcare equipment retailers that provide equipment such as hospital beds, custom power and manual wheelchairs, scooters, bathroom safety products, ambulatory aids, respiratory products and aids for daily living sold to individuals and healthcare institutions. Branches are located in Glendale and Indian Wells, California; Las Vegas, Nevada; Penticton and Vancouver, British Columbia.
The Company's shares trade on the Toronto Stock Exchange under the symbol ``CHT''. |
