Nova Leap Health Corp.’s (TSXV:NLH) first Canadian acquisition pushes annual revenue run rate past US$11 million
SmallCapPower | April 13, 2018: Announces a definitive agreement to make its third acquisition in 2018. On April 3, 2018, Nova Leap Health Corp. (TSXV:NLH) announced it has executed a definitive agreement to acquire an Eastern Canadian home care services company for US$2.14 million – US$1.87 million in cash and US$0.27 million in a two-year promissory note. This transaction is in addition to its announced acquisition of a home care services company located in New England last month, as well as Family Tree Home Care acquisition in February.
Canadian target company has 2017 unaudited reported revenue of US$2.42M and adjusted EBITDA of US$0.43M. The deal is expected to be immediately accretive and is projected to close in Q2/2018. With today’s announcement, NLH is on pace to complete three transactions in the first half of 2018 as part of the Company’s acquisitive growth plan to complete four transactions by the year-end.
After both recent deals close, NLH’s annual revenue run rate is expected to approach US$11.4 million. This amount exceeds the Company’s previously-forecasted US$10 million annualized recurring revenue run rate from its March 9 news release. Home care services hours are expected to reach 471,000 hours annually, a 34% increase from its last reported level of 352,000 annualized service hours. In addition, the Company is beginning to realize economies of scale through integration within its growth-by-acquisition model and expects to be profitable on a consolidated basis by year-end.
Financing announcement to help fund acquisitions. On April 5, 2018, Nova Leap Health announced that it is looking to raise $4 million by way of a brokered private placement at $0.30 per share. The Company intends to use the proceeds to fund the recent acquisitions of the home-care businesses located in Eastern Canada and New England.
Nova Leap Health continues to execute on its corporate M&A strategy. The Company is focused on acquiring and organically growing Private Pay Non-Medical and Skilled Home Care Companies, and these recent announcements illustrate that the Company can continue to find investment opportunities. As the full impact of its latest acquisitions will only be reflected after Q1/18 financials are reported, we continue to believe it is a good time to evaluate Nova Leap Health as an attractive investment opportunity.
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