Dear shareholders and prospective shareholders,
On June 2nd, we announced our first acquisition of 2016 in Austin, Texas. The acquisition was a joint venture, with CRH acquiring a 51% interest. The business is expected to generate total annual revenue of approximately $11.6 million. The group in Austin has been an O’Regan System customer for several years, further reaffirming our strategy of leveraging existing relationships into growth on the anesthesia side.
On June 16th, we announced a second acquisition in Boston, Massachusetts. This acquisition was also a joint venture, with CRH acquiring a 65% interest. The business is expected to generate total annual revenue of approximately $8.6 million. The Boston group initially reached out to CRH after learning about our joint venture model through a press release from a previous transaction.
In terms of size, the Boston and Austin acquisitions are the second and third largest completed to date.
Last week, on June 30th, we announced our first acquisition in Colorado further expanding our geographical footprint across the country. This transaction was a joint venture, with CRH acquiring 51% interest in the business that is expected to generate total annual revenue of approximately $2.6 million. In addition to leveraging relationships with existing O’Regan customers (this group has been a customer for several years), we are also now demonstrating a capability to scale geographically across the country while still maintaining an ability to ensure seamless integrations onto our platform.
Increase in our Credit Facility
On June 15th, we announced the increase of our existing credit facility with Scotiabank. The facility was increased from $33 million to $55 million with Scotiabank syndicating the facility with U.S. Bank. The addition of a tier one bank in the US provides further affirmation of the strength of our current business and growth strategy. Our facility interest rate remains low at approximately 3.5% and the increased amount of funds available provides greater flexibility for CRH in executing on opportunities in a timely manner.
On June 7th, our CEO, Edward Wright attended and presented at the Jefferies 2016 Healthcare Conference. This was our first presentation at a major US healthcare conference and provided us valuable exposure and access to institutional investors. Following this conference, senior management spent two days meeting with institutional accounts in New York and Boston. We remain focused on increasing our awareness and shareholder base in the US, with conference presentations and institutional marketing being two ways of achieving these goals. Management also marketed to institutional accounts in Calgary and Vancouver over the past month.
I spent time meeting with new retail accounts in Toronto and Ottawa in June. I conducted meetings both in one-on-one settings, as well as larger group presentations in both cities. This combination has shown to be an effective and efficient way of sharing the CRH story with the widest investor audience.
In June, CRH attended the ACG Eastern Regional Postgraduate Course in Washington, DC. This annual, regional meeting is typically very well attended and this year was no exception. Once again, the CRH O’Regan System was a featured device in the physician-attended hemorrhoid therapies “hands-on” session where we were able to generate a significant amount of interest. CRH Anesthesia was also presented to both new leads and existing O’Regan customers at our booth in the exhibit hall with very good reception. We look forward to returning to the meeting again next spring.
If you have any questions regarding news releases you see from CRH, or have anything would like to discuss directly, please don’t hesitate to contact me. Thank you for your continued support and we look forward to updating you again in a month’s time.