Acquires Shareholding
May 17 2010 - 2:00AM
UK Regulatory
TIDMAHI
RNS Number : 0024M
Allied Healthcare International Inc
16 May 2010
Allied Healthcare International Inc. Acquires Shareholding in Homecare
Independent Living Group
Transaction Provides Allied With Access to New and Growing Northern Ireland and
Republic of Ireland Markets
NEW YORK, NY--(Marketwire - May 16, 2010) - Allied Healthcare International Inc.
(NASDAQ: AHCI) (AIM: AHI) ("Allied" or the "Company"), a leading provider of
flexible healthcare staffing services in the United Kingdom, announced today
that its UK subsidiary, Allied Healthcare Group Limited, has acquired a
shareholding in a group of businesses commonly known as Homecare Independent
Living Group ("Homecare").
The Homecare business, with over 620 staff members, is a leading provider of
social care to the elderly, physically disabled and mentally disabled with four
operating divisions in Northern Ireland and an increasing presence in the
Republic of Ireland (Eire). The transaction will provide Allied with a
market-leading position in Northern Ireland as well as a strategic footprint in
the Republic of Ireland market. Both are new territories for the Company with
strong growth potential. Allied expects this acquisition to be earnings
enhancing. Further, the two vendors of Homecare (the "Vendors") will remain in
their existing roles as directors of the Homecare business to be joined by
directors appointed by Allied to this business.
Since its formation in 1994, Homecare has built a market-leading domiciliary
care business, in partnership with all five Health and Social Care Trusts in
Northern Ireland as well as the Health Service Executive in Eire. It also
operates three specialist divisions. The Housing and Support Services divisions
provide fully furnished temporary housing and tailored support to vulnerable
members of the community in line with the U.K. Government's policy of supporting
people in their local communities. The recently added Peripatetic Services
division combines domiciliary care, housing and support for individuals with a
high complexity of need. These specialist services are not currently provided by
Allied in its home market and the transaction offers the opportunity for the
Company to capitalize on Homecare's experience.
Allied has acquired a 50.1% shareholding in L&B (No. 182) Limited, the holding
company of the five entities that make up the Homecare business, from the
Vendors for a consideration of GBP3.9 million ($5.8 million). Such consideration
may be adjusted based on the final value of the net assets. This was funded
through Allied's cash on hand. In addition, Allied has also entered into call
option agreements giving Allied the right to buy the remaining shares between
March 2013 and March 2020. The Vendors have also entered into put option
agreements giving the Vendors the right to sell the remaining shares between
March 2011 and March 2020. The maximum amount payable by Allied for 100% of the
Homecare business will be GBP11.2 million ($16.5 million) during this period and
is subject to Homecare achieving certain annual earnings before interest, taxes,
depreciation and amortization ("EBITDA") targets. It is anticipated that the
purchase of the additional shareholdings in L&B (No.182) Limited will be funded
through cash on hand.
Sandy Young, Chief Executive Officer of Allied, commented, "Where Great Britain
has outsourced approximately 80% of home care services to the independent
sector, Northern Ireland and Eire are at approximately 50% and 5%, respectively.
We see these markets following the same trends of outsourcing and rapidly aging
populations as we have seen in Great Britain and, therefore, they are of great
strategic value to Allied. Furthermore, Homecare is a well-respected and
established business with an excellent platform for future growth across the
region. I am delighted to welcome Homecare's employees into the Allied
Healthcare Group and we look forward to working closely with the existing
directors to realize our shared vision for growth and quality of care over the
coming years."
The Directors of Homecare said, "This is an exciting milestone in our business
growth strategy and believe Allied to be the right team to grow this business
with. We view this as a major vote of confidence in the Northern Ireland and
Republic of Ireland economies and expect this to create new local job
opportunities. It gives Homecare the financial strength to both expand our
services in Northern Ireland as well as put into action our plans to
aggressively grow our presence in the underdeveloped and high potential private
care market in the Republic of Ireland."
The following disclosure is made pursuant to the AIM rules. The unaudited
statutory accounts of the five entities that make up the Homecare business for
the year ended March 31, 2009 showed aggregated revenues of GBP9.4 million
($13.9 million), profit before tax of GBP0.3 million ($0.4 million) and net
assets of approximately GBP0.2 million ($0.3 million) at March 31, 2009.
ABOUT ALLIED HEALTHCARE INTERNATIONAL INC.
Allied Healthcare International
Inc. is a leading provider of flexible healthcare staffing services in the
United Kingdom. Allied operates a community-based network of over 110 branches
with the capacity to provide carers (known as home health aides in the U.S.),
nurses, and specialized medical personnel to locations covering approximately
90% of the U.K. population. Allied meets the needs of private patients,
community care, nursing and care homes, and hospitals. For more news and
information please visit: www.alliedhealthcare.com. For more information on the
Homecare business please visit: www.homecareindependentliving.com.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release
may be forward-looking statements. These forward-looking statements are based on
current expectations and projections about future events. Actual results could
differ materially from those discussed in, or implied by, these forward-looking
statements. Factors that could cause actual results to differ from those implied
by the forward-looking statements include: general economic and market
conditions; Allied's ability to continue to recruit and retain flexible
healthcare staff; Allied's ability to enter into contracts with local government
social services departments, NHS Trusts, hospitals, other healthcare facility
clients and private clients on terms attractive to Allied; the general level of
demand for healthcare and social care; dependence on the proper functioning of
Allied's information systems; the effect of existing or future government
regulation of the healthcare and social care industry, and Allied's ability to
comply with these regulations; the impact of medical malpractice and other
claims asserted against Allied; the effect of regulatory change that may apply
to Allied and that may increase costs and reduce revenues and profitability;
Allied's ability to use net operating loss carry forwards to offset net income;
the effect that fluctuations in foreign currency exchange rates may have on our
dollar-denominated results of operations; and the impairment of goodwill, of
which Allied has a substantial amount on the balance sheet, may have the effect
of decreasing earnings or increasing losses. Other factors that could cause
actual results to differ from those implied by the forward-looking statements in
this press release include those described in Allied's most recently filed SEC
documents, such as its most recent annual report on Form 10-K, all quarterly
reports on Form 10-Q and any current reports on Form 8-K filed since the date of
the last Form 10-K. Allied undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events, or otherwise.
Allied Healthcare International Inc.
Sandy Young
Chief Executive Officer
Paul Weston
Chief Financial
Officer
+44 17 8581 0600
Or
Piper Jaffray Ltd. (Nominated
Adviser)
Matthew Flower
Rupert Winckler
+44 20 3142
8700
Or
ICR, LLC
Sherry Bertner
Managing Director
+1 646 277
1200
sherry.bertner@icrinc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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