NOVA LEAP HEALTH CORP. (TSXV: NLH) (“Nova Leap” or “the Company”),
a growing home health care organization, is pleased to announce
that it has executed a definitive agreement (the “Agreement”) to
acquire all of the shares of two affiliated home care services
companies (“the Targets”) with operations in Nova Scotia (the
“Transaction”). The Targets reported aggregate unaudited revenue of
approximately $2.56 million, unaudited net income of approximately
$235,000 and Adjusted EBITDA of approximately $276,000 for the 2023
fiscal year. All amounts are in Canadian Dollars (“CAD”) unless
otherwise specified.
Under the terms of the Agreement, the
Transaction is to be made for total consideration of $1,380,000, on
a cash-free, debt-free basis and subject to customary post-closing
working capital adjustments, with the full amount payable in cash
on closing. The $1,380,000 purchase price will be funded by way of
a debt facility with the Company’s lender and is repayable over a
five-year term.
“As mentioned in previous shareholder
communications, we have been actively working on acquisition
opportunities since re-engaging our M&A program,” said Dana
Hatfield, Chair of the Board of Nova Leap. “This acquisition allows
us to expand our geographical coverage within the province with the
addition of two new territories.”
The Transaction is a Non-Arm’s Length
transaction pursuant to TSX Venture Exchange (“TSXV”) policies, as
the vendors are controlled by Chris Dobbin, a Director, CEO and
significant shareholder of Nova Leap, and the Estate of Wayne
Fulcher, a shareholder with more than 10% of the outstanding shares
of Nova Leap. In addition, Jill Dobbin, an officer of certain
subsidiaries of Nova Leap, is also an officer of the Targets. The
Transaction is also a related party transaction pursuant to
Multilateral Instrument 61-101, Protection of Minority Security
Holders in Special Transactions (“MI 61-101”). However, Nova Leap
is exempt from the valuation and minority approval requirements in
MI 61-101 as the fair market value of the shares to be acquired by
Nova Leap and the purchase price payable does not exceed 25% of its
market capitalization.
Completion of the Transaction is subject to the
satisfaction of certain conditions, including the approval of the
TSXV and lender approval. The Transaction also requires the
approval of disinterested shareholders of the Company, to be sought
at a meeting of the shareholders which is expected to be held in
December.
The Transaction is expected to be immediately
accretive and there are no finder fees to be paid. Closing of the
Transaction is expected to occur by the end of 2024.
Update on Florida
Acquisition
As announced on October 15, 2024, the Company is
completing the acquisition of certain assets from a home care
services business based in Florida. Under the terms of the
agreement, the acquisition is to be made for total consideration of
USD$1,636,000, subject to closing adjustments, of which
USD$1,316,000 is payable with cash on closing and USD$320,000 is by
way of a promissory note repayable in equal annual installments of
principal commencing on the 12-month anniversary of the closing
date and continuing until paid in full and bearing interest at a
rate of 3.0% per annum, which accrued interest shall be paid
annually on the applicable note payment due date with the annual
installments of principal. No liabilities will be assumed pursuant
to the acquisition.
The acquisition is also a Non-Arm’s Length
transaction pursuant to TSXV policies and requires disinterested
shareholder approval. The Company intends to seek approval for the
acquisition by written consent of shareholders as permitted by TSXV
policies.
About Nova Leap
Nova Leap is an acquisitive home health care
services company operating in one of the fastest-growing industries
in the U.S. & Canada. The Company performs a vital role within
the continuum of care with an individual and family centered focus,
particularly those requiring dementia care. Nova Leap achieved the
#42 ranking on the 2021 Report on Business ranking of Canada’s Top
Growing Companies, the #2 ranking on the 2020 Report on Business
ranking of Canada’s Top Growing Companies and the #10 Ranking in
the 2019 TSX Venture 50™ in the Clean Technology & Life
Sciences sector. The Company is geographically diversified with
operations in 10 different U.S. states within the New England,
Southeastern, South Central and Midwest regions as well as in Nova
Scotia, Canada.
NON-IFRS MEASURES:
This release contains references to certain
measures that do not have a standardized meaning under IFRS as
prescribed by the International Accounting Standards Board (“IASB”)
and are therefore unlikely to be comparable to similar measures
presented by other companies. Rather, these measures are provided
as additional information to complement IFRS measures by providing
a further understanding of operations from management’s
perspective. Accordingly, non-IFRS financial measures should not be
considered in isolation or as a substitute for analysis of
financial information reported under IFRS. The Company presents
non-IFRS financial measures, specifically Adjusted EBITDA (as such
term is hereinafter defined), as well as supplementary financial
measures such as annualized revenue and annualized adjusted EBITDA.
The Company believes these non-IFRS financial measures are
frequently used by lenders, securities analysts, investors and
other interested parties as a measure of financial performance, and
it is therefore helpful to provide supplemental measures of
operating performance and thus highlight trends that may not
otherwise be apparent when relying solely on IFRS financial
measures.
Adjusted Earnings before interest, taxes,
amortization and depreciation (“Adjusted EBITDA”), is calculated as
income from operating activities plus amortization and depreciation
and stock-based compensation expense. The most directly comparable
IFRS measure is income from operating activities.
Annualized Adjusted EBITDA is calculated as
actual Adjusted EBITDA for a specific period of time extrapolated
over 365 days.
FORWARD LOOKING
INFORMATION:
Certain information in this press release may
contain forward-looking statements, such as statements regarding
the closing of the acquisition (including timing) and its expected
impact on the Company, financing of the acquisition, and plans
regarding future acquisitions and business growth. This information
is based on current expectations and assumptions, including
assumptions described elsewhere in this release and those
concerning general economic and market conditions, the satisfaction
of conditions to closing the acquisition, availability of working
capital necessary for conducting Nova Leap’s operations,
availability of desirable acquisition targets and financing to fund
such acquisitions, and Nova Leap’s ability to integrate its
acquired businesses and maintain previously achieved service hour
and revenue levels, that are subject to significant risks and
uncertainties that are difficult to predict. Actual results might
differ materially from results suggested in any forward-looking
statements. Risks that could cause results to differ from those
stated in the forward-looking statements in this release include
staff and supply shortages, regulatory changes affecting the home
care industry or government programs utilized by the Company, other
unexpected increases in operating costs and competition from other
service providers. All forward-looking statements, including any
financial outlook or future-oriented financial information,
contained in this press release are made as of the date of this
release and included for the purpose of providing information about
management's current expectations and plans relating to the future,
and these statements may not be appropriate for other purposes. The
Company assumes no obligation to update the forward-looking
statements, or to update the reasons why actual results could
differ from those reflected in the forward-looking statements
unless and until required by securities laws applicable to the
Company. Additional information identifying risks and uncertainties
is contained in the Company's filings with the Canadian securities
regulators, which filings are available at www.sedarplus.ca.
CAUTIONARY STATEMENT:
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For further information:
Chris LeBlanc, CPA
Chief Financial Officer & Corporate Secretary
Nova Leap Health Corp.
E:cleblanc@novaleaphealth.com
Grafico Azioni Nova Leap Health (TSXV:NLH)
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Grafico Azioni Nova Leap Health (TSXV:NLH)
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