Skylight Health Completes Largest Acquisition to date and Enters Medicare Advantage Global Risk
06 Mayo 2022 - 6:00AM
Skylight Health Group Inc. (NASDAQ:SLHG; TSXV:SLHG) (“Skylight
Health” or the “Company”), a multi-state primary care management
group in the United States, is pleased to announce that further to
its press release dated May 3, 2022, it has completed the deal to
acquire NeighborMD (NMD) for $8 million and a debt facility of US
$20 million.
“We are very pleased to close our largest
acquisition to date and welcome the team at Neighbour MD into the
Skylight Health Group,” says Prad Sekar, CEO and Co-Founder of
Skylight Health. “Not only does this more than double our revenue
run rate and strengthen our market share in Florida, but it also
significantly accelerates our entry into full-risk in 2022, as
originally planned for 2025. We are now strongly positioned with
risk contracts to begin focusing on our pipeline within Florida
that will present Medicare and MA growth.”
Based in central and southern Florida, NMD
operates 9 owned practices offering primary care services to over
5,000 lives. Within these, NMD has over 1,100 MA lives in full risk
contracts with two leading healthcare payors in the Florida, Humana
and CarePlus. In addition, NMD provides complete management
services for over 1,400 additional MA lives through its affiliated
providers and practices. NMD’s existing contracts offer competitive
capitation fee schedules and allow for broad geographic coverage,
with over 30 Florida counties covered, including all counties in
which Company currently operates. Of the Medicare Advantage lives
at full risk, NMD currently saw an average reimbursement of $10,000
to $12,000, per member/per year, which Skylight expects to maintain
going forward, thereby providing the capital to focus on the
patient needs and improved patient health outcomes. TTM revenues
from primary care including MA contracts were approximately US $35
million on an unaudited basis. While NMD has not yet generated
profitability, with its scale in combination with Skylight and
planned initiatives, it is expected to become profitable this year.
The expected expansion of the risk contracts to existing Skylight
practices in Florida represent a significant organic growth
opportunity.
Total consideration for NMD was US $8 million
paid in cash at closing. Skylight financed this transaction with a
drawdown of US $10 million from a US $20 million debt line facility
with a FLC which will also be used for working capital to support
integration and operational expenses. The Company will still have
US $10 million and working capital available to fund additional
acquisitions. Term of the facility is 3 years, with an annual
coupon of SOFR plus 11% paid in cash. Principal will be amortized
on a quarterly basis and subject to certain cash sweep triggers and
a final balloon payment. Cash payments including interest will
begin in July. The Company may, at its discretion, pay back the
lender in part or in full at any time during the term, without
premium or penalty. FLC has received additional consideration of
4,542,345 warrants priced at $1.17. The expiry date will be May 5,
2025, with respect to that percentage of the warrants that is equal
to the percentage of the amount of principal amount of the debt
line facility outstanding on May 5, 2023, compared to the amount
outstanding on May 5, 2022, and the expiry date will be May 5,
2023, for the remaining warrants. Half (50%) of the warrants will
be held in escrow and released in proportion to the pro rata
percentage of the amount of any future draw downs.
About Skylight Health
Group
Skylight Health Group (NASDAQ:SLHG;TSXV:SLHG) is
a healthcare services and technology company, working to positively
impact patient health outcomes. The Company operates a US
multi-state primary care health network comprised of physical
practices providing a range of services from primary care,
sub-specialty, allied health, and laboratory/diagnostic testing.
The Company is focused on helping small and independent practices
shift from a traditional fee-for-service (FFS) model to value-based
care (VBC) through tools including proprietary technology, data
analytics and infrastructure. In an FFS model, payors (commercial
and government insurers) reimburse on an encounter-based approach.
This puts a focus on volume of patients per day. In a VBC model,
the providers offer care that is aimed at keeping patients healthy
and minimize unnecessary health expenditures that are not proven to
maintain the patient’s well-being. This places an emphasis on
quality over volume. VBC will lead to improved patient outcomes,
reduced cost of delivery and drive stronger financial performance
from existing practices.
Forward Looking Statements
This press release may include predictions,
estimates or other information that might be considered
forward-looking within the meaning of applicable securities laws.
While these forward-looking statements represent our current
judgments, they are subject to risks and uncertainties that could
cause actual results to differ materially. You are cautioned not to
place undue reliance on these forward-looking statements, which
reflect our opinions only as of the date of this release. Please
keep in mind that we are not obligating ourselves to revise or
publicly release the results of any revision to these
forward-looking statements in light of new information or future
events. When used herein, words such as “look forward,” “believe,”
“continue,” “building,” or variations of such words and similar
expressions are intended to identify forward-looking statements.
Factors that could cause actual results to differ materially from
those contemplated in any forward-looking statements made by us
herein are often discussed in filings we make with the Canadian and
United States securities regulators, including the Securities and
Exchange Commission, available at: www.sec.gov, and Canadian
Securities Administrators, available at www.sedar.com, and on
our website, at skylighthealthgroup.com.
For more information, please visit our website or contact:
Investor Relations:Jackie
Kellyinvestors@skylighthealthgroup.com 416-301-2949
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.
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