This morning, Centric Health Corporation (TSX: CHH), announced the successful closing of two previously announced transactions --- a private placement of common shares and convertible debentures, and the sale of its Surgical and Medical Centres business --- bringing in aggregate gross proceeds of $70.24 million. The closing of these transactions comes just over two weeks after the company announced strong third quarter results highlighted by revenue growth of 12.4% and adjusted EBITDA growth of 204.1% in their Specialty Pharmacy business.
Centric Health sold its Surgical and Medical Centres business to Clearpoint Health Network Inc. for gross proceeds of $35 million. Centric Health announced last year that it was focusing on the seniors healthcare market in Canada, primarily on institutional pharmacy operations.
The company raised gross proceeds of $35.24 million through the private placement of common shares and convertible debentures. Pursuant to the private placement, the company issued 64,500,000 common shares at $0.12 per share for gross proceeds of $7.74 million and 8.25% unsecured debentures convertible into common shares in the aggregate principal amount of $27.5 million.
The investors in the private placement included Yorkville Asset Management Inc. for and on behalf of certain managed funds (“Yorkville”), and certain existing major shareholders of the Company, including Ewing Morris & Co. Investment Partners Ltd., for and on behalf of certain funds and accounts managed by it ( “Ewing Morris”) and Dr. Jack Shevel and certain entities over which Dr. Shevel exercises control or direction, together with certain related parties and joint actors (“Dr. Shevel”), and the company’s President and Chief Executive Officer, David Murphy.
Contemporaneously with the closing of the private placement, the company also exchanged 30,000,000 convertible preferred shares of the company for $12.54 million of 8% unsecured convertible debentures held by Ewing Morris.
The net proceeds from both transactions are expected to be used to reduce bank debt and for working capital purposes.