Skylight Health to Acquire US Clinic Group with over 6 Locations, $20 Million in Revenue and $3 Million EBITDA

Skylight Health to acquire US-based Healthcare Group which operates a network of over 6 primary and urgent care centers.2020 unaudited revenue of over $20 million and $3 million EBITDA.Immediately accretive deal strengthens organizational team with a robust, centralized corporate infrastructure for national network.Skylight Health forecasted annual revenue run rate now over $45 million and EBITDA run rate of $5.5 million after closing of the transaction.Transaction expected to close Q1 2021.
TORONTO, Jan. 07, 2021 (GLOBE NEWSWIRE) — Skylight Health Group Inc (TSXV:SHG; OTCQX: SHGFF) (“Skylight Health”, “SHG” or the “Company”), one of the largest multi-specialty healthcare systems in the United States, is pleased to announce that it has entered into a Binding Letter of Intent (LOI) (the “Transaction), signed on January 6, 2021 to purchase 100% of the shares of a US Primary and Urgent Care clinic group (the “Clinic”) in an arms-length acquisition. For confidentiality reasons, the name and location of the group will remain undisclosed until the closing of the Transaction before the end of Q1 2021. The planned acquisition of the Clinic expands the Company’s bricks and mortar and telemedicine services within one of the existing Skylight Health states.The Clinic has been operating an established and fast-growing network of primary care clinics. The group is actively credentialed with major insurance carriers. Aligned with SHG’s multi-disciplinary strategy, the Clinic employs a multi-disciplinary approach to patient care management. The Clinic has been successful in servicing Regional Health Systems with pre & post acute care, reducing emergency room visits and readmissions within the communities it serves. The Clinic’s clinical staff mix includes physicians, nurse practitioners, and physician assistants.The Clinic adds immediate incremental revenue to SHG as it strengthens its market share within an existing state, as well as builds upon the infrastructure to support SHG’s national network of clinics and further growth. The Clinic has built a sustainable and scalable corporate infrastructure including in-house revenue cycle management, credentialing, centralized scheduling, compliance, and medical leadership. SHG expects continuity of its leadership team and clinical staff post-acquisition.Prad Sekar, CEO, Skylight Health said, “This is an exciting acquisition for SHG. Not only does this further strengthen our position in the US market to bring a one-stop shop approach to care for patients, but significantly reinforces our corporate infrastructure to further scale across other US markets. We have highlighted several transactions of material size throughout 2020 and we are glad to begin executing against this pipeline. With each acquisition, we enhance and strengthen our team to continue to build value for patients and drive fundamental business growth.”As per terms of the binding LOI, the Company will purchase 100% of the shares of the Clinic for $14.3 million, representing a 4.7x EBITDA multiple. The structure of the deal will include 40% cash ($5.7 million) from the Company and a 3-years seller’s note for the remaining 60% ($8.58 million) at an 8% interest rate. SHG at its option may, at any time, repay the Note in part or in full prior to the end of the Term without penalty. If SHG retires the Note earlier than the Term, no further payments will be required or incurred by SHG. On an unaudited basis, the Clinic is expected to generate over $20 million in annual revenue and $3 million in EBITDA. This transaction is subject to a satisfactory due diligence period by the Company and mutual agreement to a Share Purchase Agreement and Closing Conditions and subject to regulatory and Board approval. The transaction is expected to close by the end of Q1 2021.About Skylight Health GroupSkylight Health Group (TSXV:SHG OTCQX:SHGFF) is a healthcare services and technology company, working to positively impact patient health outcomes. The Company operates a US multi-state health network that comprises of physical multi-disciplinary medical clinics providing a range of services from primary care, sub-specialty, allied health and laboratory/diagnostic testing. The Company owns and operates a proprietary electronic health record system that supports the delivery of care to patients via telemedicine and other remote monitoring system integrations. With a patient roster of over 150,000 patients, the Company’s operations spread across 15 states and continues to expand in services and locations both organically and by way of strategic acquisitions.The Company primarily operates a traditional insurable fee-for-service model contracting with Medicare, Medicaid and other Commercial Payors. The Company also offers a disruptive subscription-based telemedicine service for the un/under-insured population who have limited access to urgent care due to cost.For more information please visit or contact:Investor Relations:
Jackie Kelly
[email protected] 
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.Currency Usage, Cautionary and Forward-Looking StatementsAll currency contained in this Press Release represent Canadian Dollars unless otherwise stated.Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in Skylight Health’s filings with Canadian securities regulators. When used in this news release, words such as “will, could, plan, estimate, expect, intend, may, potential, believe, should,” and similar expressions, are forward-looking statements.Forward-looking statements may include, without limitation, statements regarding the Company’s unaudited financial results and projected growth.Although Skylight Health has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: the ability of Skylight Health to execute on its business strategy, continued revenue growth in accordance with management’s expectations, operating expenses continuing in accordance with management expectations, dependence on obtaining regulatory approvals; Skylight Health being able to find, complete and effectively integrate target acquisitions; change in laws relating to health care regulation; reliance on management; requirements for additional financing; competition; hindering market growth or other factors that may not currently be known by the Company.There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events.Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. Skylight Health disclaims any intention or obligation to update or revise such information, except as required by applicable law, and Skylight Health does not assume any liability for disclosure relating to any other company mentioned herein.Non-GAAP Financial MeasuresThis Press Release contains references to EBITDA. This financial measure is not a measure that has any standardized meaning prescribed by IFRS and is therefore referred to as a non-GAAP measure. The non-GAAP measures used by the Company may not be comparable to similar measures used by other entities. EBITDA is defined as “income (loss) before interest expenses, taxes, expenses related to maintaining a public listing, depreciation, foreign exchange and financial expenses.The Company uses non-GAAP measures because they provide additional information on the performance of its commercial operations. Such tools are frequently used in the business world to analyze and compare the performance of businesses; however, the Company’s definition of these metrics may differ from those of other businesses. Skylight Health will, at times, use certain non-GAAP financial measures to provide readers with additional information in order to assist investors in understanding our financial and operating performance.  Skylight Health believes that these non-GAAP measures provide readers with useful information about the Company’s operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.EBITDA excludes the effect of share-based compensation expenses and related payroll taxes as well as removes substantial one-time costs for unusual business activities. Additional discussion on this can be found in the Skylight Health Management Discussion and Analysis filed on SEDAR.Such non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, the corresponding measures calculated in accordance with IFRS. See the Company’s audited Financial Statements for a reconciliation of the non-GAAP measures.No securities regulator or exchange has reviewed, approved, disapproved, or accepts responsibility for the content of this news release. 

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