CRH Medical Corporation Announces Majority Purchase of an Anesthesia Practice in North Carolina and Provides an Outlook for Q3 2017
VANCOUVER, B.C. – September 22, 2017 – CRH Medical Corporation (TSX: CRH) (NYSE MKT: CRHM) (the “Company”), announces that it has completed an accretive transaction whereby CRH has acquired a 51% interest in a gastroenterology (“GI”) anesthesia practice in Raleigh, North Carolina (“Raleigh”).
Raleigh provides anesthesia services to three ambulatory surgical centers in North Carolina. The transaction was financed through a combination of CRH’s credit facility and cash on hand.
Raleigh transaction highlights:
- Total 2018 annual estimated revenue1 of US$5.3 million
- EBITDA and cash flow accretive
- Structured as joint venture with CRH acquiring a 51% interest
1Total 2018 annual estimated revenue takes into consideration the Centers for Medicare and Medicaid’s proposed 2018 Physician Fee Schedule. Please refer to our news release dated July 17, 2017 for more details.
Outlook for Q3 2017
The Company is providing an outlook for the three months ending September 30, 2017. This outlook reflects: (a) recent data implying that commercial insurance patient cases will not increase as much as expected in Q3 2017 compared to Q2 2017, (b) the expected impact of Hurricane Irma on facilities we serve in the Southeastern United States resulting in approximately 1,500 procedures being cancelled, and (c) the positive impact of our recently announced acquisitions. The Company is providing this outlook to clarify shareholder expectations considering such factors affecting the Company. For the three months ending September 30, 2017, total revenue is expected to be approximately US$22.7 million. Adjusted Operating EBITDA2 attributable to shareholders for the period is estimated to be approximately US$7.3 million.
- Adjusted operating EBITDA is a non-IFRS measure defined as operating income before interest, taxes, depreciation and related expenses, amortization, stock-based compensation, acquisition-related expenses, and asset impairment charges. Refer to the Company’s Financial Report for the quarter ended June 30, 2017 for a reconciliation of reported financial results to non-IFRS measures.
Edward Wright, CEO of CRH, commented on the transaction, “We are thrilled to partner with Raleigh, another existing O’Regan customer, to grow our operations in North Carolina. This is our fifth acquisition this year and it brings us closer to achieving our anesthesia expansion objectives for 2017.”
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 13 additional acquisitions to its anesthesia business. CRH Anesthesia now services 34 ambulatory surgical centers in seven states and performs approximately 230,000 procedures annually.