CRH Medical Corporation Announces Acquisition in Florida and First Monitored Anesthesia Care Development Program in Washington State
VANCOUVER, B.C. – March 15, 2017 – CRH Medical Corporation (TSX: CRH) (NYSE MKT: CRHM) (the “Company”), announces that it has completed an accretive transaction whereby CRH has acquired a 60% interest in a gastroenterology (“GI”) anesthesia practice in Kissimmee Florida (“Kissimmee”).
CRH also announces that it has entered into an exclusive agreement to develop and manage a monitored anesthesia care (“MAC”, or “Deep Sedation”) program with Puget Sound Gastroenterology (“PSG”), located in Washington State. Under the terms of the agreement, CRH has the option to acquire 51% of the newly created MAC business at a future date.
Kissimmee Transaction Highlights:
- Total annual estimated revenue of US$2.2 million
- EBITDA and cash flow accretive
- Services one ambulatory surgical center (“ASC”) and is CRH’s third acquisition in Florida
- Structured as joint venture with CRH retaining a 60% interest
PSG Transaction Highlights:
- PSG is a premier group of gastroenterologists with four ASCs in the greater Seattle area
- CRH to develop and manage an MAC program for PSG
- CRH retains an option to purchase 51% of the new anesthesia business at a future date, no sooner than 12 months
CRH estimates that approximately half of the endoscopic procedures administered in ASCs are performed without MAC, the standard of care for anesthesia for endoscopic procedures. CRH’s MAC Development Program represents a significant new opportunity to expand the Company’s anesthesia services business by employing its expertise to assist gastroenterology practices to transition to monitored anesthesia for better patient care.
Edward Wright, CEO of CRH, stated, “The Kissimmee transaction with an existing O’Regan customer expands our anesthesia presence to 27 ASCs. More importantly, the MAC program will contribute greatly to CRH’s long-term shareholder value and is a significant new opportunity to engage gastroenterologists currently not utilizing Deep Sedation, which may be as much as 50% of the GI market. Under the MAC program, CRH has the option to purchase 51% of PSG’s anesthesia business after 12 months. Until such time, we will not recognize any material revenue or expense from PSG.”
About CRH Medical Corporation
CRH Medical Corporation is a North American company focused on providing gastroenterologists throughout the United States with innovative services and products for the treatment of gastrointestinal diseases. The CRH O’Regan System is a single-use, disposable, hemorrhoid banding technology that is safe and highly effective in treating all grades of hemorrhoids. CRH distributes the O’Regan System, treatment protocols, operational and marketing expertise as a complete, turnkey package directly to gastroenterology practices, creating meaningful relationships with the gastroenterologists it serves. CRH’s O’Regan System is currently used in all 48 lower US states.
In 2014, CRH acquired Gastroenterology Anesthesia Associates, LLC (“GAA”), a full-service gastroenterology anesthesia company that provides anesthesia services for patients undergoing endoscopic procedures. Since then, CRH has incorporated ten additional acquisitions to its anesthesia business. CRH Anesthesia now services 27 ambulatory surgical centers in seven states and performs approximately 170,000 procedures annually.
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