Nova Leap Health Corp. Announces Execution of Definitive Agreement to Acquire Home Care Business in Massachusetts
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HALIFAX, Nova Scotia, Oct. 23, 2020 (GLOBE NEWSWIRE) -- NOVA LEAP HEALTH CORP. (TSXV: NLH) (“Nova Leap” or “the Company”), a 2019 TSX Venture 50 ranked company focused on the home health care industry, is pleased to announce that it has executed a definitive agreement (the “Agreement”), dated October 23, 2020, to acquire a home care services company (“the Target”) located in Massachusetts. The Target reported unaudited revenues of approximately $2.245 million, and EBITDA of approximately $347,000 for the 2019 calendar year. All amounts are in United States Dollars (“USD”) unless otherwise specified.
Under the terms of the Agreement, the acquisition is to be made for total maximum consideration of $1.275 million of which $600,000 is payable with cash on closing, $375,000 is by way of a promissory note repayable over a three-year period bearing interest of 2% per annum and up to $300,000 by way of a 3-year structured earnout (the “Earnout”). The promissory note will be secured by a corporate guarantee by Nova Leap Health Corp. and is subordinated to Nova Leap’s primary commercial lender.
Under the Earnout, the maximum potential annual payout in each of 2022, 2023, and 2024 is subject to a ceiling of $100,000 and is calculated based on gross service revenue of the acquired operations for the previous 12-month period, which begins January 1, 2021. The Earnout is also subject to a floor such that no payments will be made in a given year if gross service revenue falls below approximately $1.58 million for the preceding 12-month period.
The acquisition is expected to be immediately accretive and closing of the acquisition is subject to final due diligence. The acquisition is at arm’s length and there are no finder’s fees to be paid.
“We’re excited to continue expanding within Massachusetts and to welcome a great team to our organization,” said Chris Dobbin, President & CEO of Nova Leap. “I’m excited about the quality of people we are attracting and about what lies ahead.”
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 centred focus, particularly those requiring dementia care. Nova Leap achieved the #10 Ranking in the 2019 TSX Venture 50 in the Clean Technology & Life Sciences sector. The Company is geographically diversified with operations in 7 different U.S. states within the New England and South- Central regions as well as Nova Scotia, Canada.