Allied Healthcare International Inc. Acquires ScotHomecare
Posted on March 07, 2011 at 07:00 AM EST
The Transaction Makes Allied the Largest Provider of Domiciliary Care in Scotland
NEW YORK, NY -- (Marketwire) -- 03/07/11 -- Allied Healthcare International Inc. (NASDAQ: AHCI), a leading provider of flexible healthcare staffing services in the United Kingdom, announced today that its UK subsidiary, Allied Healthcare Group Limited, has acquired the homecare business of Health and Lifecare Options Limited (HALO).
ScotHomecare is a flexible domiciliary homecare business with nine branches in Scotland and one branch in Leicester, England. ScotHomecare delivers over 10,000 care hours per week for the elderly, as well as for adults with physical disabilities and has revenues of approximately £6 million ($9.8 million) per annum. ScotHomecare's services include adult health care, child nursing care, palliative care nursing and elderly care services.
The acquisition expands Allied's operations, making it the largest provider of domiciliary care in Scotland. In addition to a significant volume increase in hours, the transaction will allow Allied to introduce new higher margin services, including learning disabilities and continuing care, in the new locations. The Company will also have an opportunity to expand existing volumes of care to the elderly under Allied's management structure. Allied expects this acquisition to be accretive to its earnings.
Allied has acquired the entire share capital of HALO for a total of £2.5 million ($4.1 million). This was funded through Allied's cash on hand. £0.8 million ($1.3 million) initial consideration was paid on completion of the transaction, £0.2 million ($0.3 million) was deferred for three months to finalize completion accounts, and £1.5 million ($2.4 million) of liabilities will be repaid by Allied. In addition, £250,000 ($407,000) of working capital and sundry fixed assets associated with the business are included on completion.
Sandy Young, Chief Executive Officer of Allied, commented, "The ScotHomecare acquisition is in line with our strategy of expanding Allied's geographic footprint and enhancing value for our shareholders. The transaction will provide Allied with a market leading position in Scotland, as it will double our current Scottish operations of 11 branches and help to support their strong growth momentum for the past two years. We will now be able to develop both learning disabilities and continuing care services at an increased scale. We also expect to benefit from ScotHomecare's customer base and reputation. Further, we believe we will be able to benefit from additional outsourcing opportunities in Scotland, as the Scottish market is currently only 40% outsourced as compared to 80% in England. I am also delighted to welcome ScotHomecare employees into the Allied Healthcare Group and provide them with new opportunities within the combined business."
Ann Rushforth, former Chief Executive Officer and owner of HALO, added, "It has been a pleasure to lead the ScotHomecare team to this point, and I leave the business in the capable hands of the current Managing Director of ScotHomecare, Anne Sinclair. The ScotHomcare team is excited to be joining the Allied business and building upon the organization's proven track record of strength and customer reputation. The combination of our branch management and staff, as well as additional customer relationships, will create better geographical coverage, scale and opportunity to improve services and provide best in the industry healthcare and social care services throughout Scotland."
About Allied Healthcare International Inc.
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