PHM Announces Execution of Letter of Intent (LOI) to Acquire a Business With More Than $8 Million in Trailing-12-Month Annual Revenue, Additional Service Offerings and a Large Patient Database

LOS ANGELES, CALIFORNIA--(Marketwired - Dec. 22, 2014) -

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Patient Home Monitoring Corp. (TSX VENTURE:PHM) ("PHM") announced it has executed a non-binding Letter of Intent (LOI) to acquire a company reporting unaudited trailing 12 month revenues in excess of $8,000,000. Besides its large database of patients, this company offers two high growth revenue lines currently not focused on by PHM -- custom mobility and retail stores offering innovative home medical products.

The acquisition of this growing and profitable company is expected to be immediately accretive to the income statement and will increase PHM's earnings-per-share (EPS). As a result of this acquisition, that is expected to close in the first calendar quarter of 2015, PHM's annual revenue run rate is expected to exceed $48,000,000 at the time of close.

Since 1998, the acquisition target company has served tens of thousands of patients in the states of Maine and New Hampshire. PHM expects to generate post acquisition organic growth from four strategies: (1) the acquisition is slated to give PHM additional locations and access to thousands of active patients with multiple chronic illnesses, resulting in cross-selling opportunities with PHM's existing cardiology services, pulmonology services and drug distribution services; (2) PHM plans to cross sell custom mobility services and products to its existing patients; (3) PHM plans to expand this compelling retail concept to existing PHM locations in much larger markets throughout South Carolina, California, Georgia and Florida; and (4) by acquiring patients in the 40-65 year age group through the retail stores, PHM also gains a clear advantage in keeping and serving the needs of these patients as chronic conditions emerge later in life.

The majority of the consideration is proposed to be paid in PHM common shares. Key executives of the acquisition target company have agreed to join PHM in management roles. Closing the acquisitions will be subject to final due diligence and a binding purchase agreement. According to the LOI, PHM expects to close the acquisition with less than $1,000,000 in cash, with the majority of the consideration being paid with approximately 7,000,000 PHM common shares, subject to final due diligence of trailing 12 month Adjusted EBITDA. Shares issued as part of the acquisition are estimated to be less than 5% of the total common shares outstanding while inorganic Adjusted EBITDA growth is expected to exceed 10%, resulting in increasing EPS immediately upon acquisition. When this company is added to PHM's current operations, the expected revenue run rate of all entities, based upon the combined 12-month trailing revenue, will be an increase of nearly 20% of the current PHM annual revenue run rate. After the acquisition, PHM expects continued strong organic Adjusted EBITDA growth from cross selling. "While certainly adding meaningful revenue, the value of this acquisition resides mainly in the compelling prospective revenue and profit growth by cross selling into the large patient database and expanding services offered to our current patients," said Michael Dalsin, Chairman of PHM. "With this deal, we acquire a long standing business with thousands of patients that are eligible for cross selling our cardiology, pulmonary and drug delivery services. It also provides PHM with two additional compelling revenue lines. In custom mobility we will address a large and growing market for patients disabled by diabetes, aging and obesity. With the retail store concept, we penetrate a new and growing market for 40-65 year old patients with brick-and-mortar stores offering innovative home medical products. As those retail customers age, we can leverage that existing relationship to serve their increasing healthcare needs in later years, increasing our market share and further lowering patient acquisition costs. As it stands today, we have eleven additional deals in the pipeline and continue to believe we can close additional earnings accretive acquisitions with our current balance sheet of over $22,500,000 in cash. I am looking forward to a very active 2015 on the acquisition front."