PLANTATION, Fla., July 26, 2021 /CNW/ - Akumin Inc. (NASDAQ:
AKU) (TSX: AKU) ("Akumin") is pleased to provide an update with
respect to its previously announced proposed acquisition of
Alliance HealthCare Services, Inc. ("Alliance") and to announce the
filing today in Akumin's public disclosure at www.sedar.com and
www.sec.gov of (i) consolidated financial statements of Alliance
for the years ended December 31, 2020
and 2019, (ii) condensed consolidated financial statements of
Alliance as of March 31, 2021, (iii)
unaudited pro forma combined financial information as at
March 31, 2021 (after giving effect
to the acquisition and related financing arrangements), and (iv)
management discussion and analysis relating to items (i) and (ii)
above.
The acquisition continues to be expected to close in the third
quarter of 2021 subject to clearance under the Hart-Scott-Rodino
Antitrust Improvements Act and other customary closing conditions,
including final approval of the Toronto Stock Exchange.
Management Composition Post-Closing of Acquisition
Upon closing of the acquisition, Riadh
Zine, Akumin's existing President and Chief Executive
Officer, will be named Chairman and Co-Chief Executive Officer of
Akumin and Rhonda Longmore-Grund,
Alliance's existing President and Chief Executive Officer, will be
named President and Co-Chief Executive Officer of Akumin. In
addition, William Larkin, Alliance's
existing Chief Financial Officer, will be named Chief Financial
Officer of Akumin and Mohammad
Saleem, Akumin's existing Chief Financial Officer, will be
named Senior Vice President of Financial Reporting. Other senior
officer positions will be announced as determined in connection
with the acquisition.
Director Appointments Post-Closing of Acquisition
Further, as previously announced, on closing of the acquisition,
the Akumin board of directors will exercise its right in accordance
with applicable corporate laws to increase the size of the board
and appoint a nominee of Thaihot Investment Co., LTD (the
"Seller"), the seller of Alliance, to fill the vacancy at
closing.
In addition, as previously announced, Akumin will hold a special
meeting of shareholders within 90 days after closing the
acquisition for the appointment of three additional nominees to its
board of directors. Subject to clearance of customary
exchange conditions, those nominees will consist of (i)
James Wyper, (ii) Rhonda Longmore-Grund and (iii) Paul Viviano.
Mr. Wyper will serve as a nominee of Stonepeak, a leading
alternative investment firm providing debt and equity financing to
Akumin in connection with the acquisition of Alliance. Mr. Wyper is
a Senior Managing Director with Stonepeak Infrastructure Partners
where he is responsible for leading investments across the
healthcare, transportation and logistics sectors. Ms.
Longmore-Grund joined Alliance in 2016 as Executive Vice President
and Chief Financial Officer before being named Chief Executive
Officer in 2018. Mr. Viviano has been President and Chief Executive
Officer of Children's Hospital Los Angeles since 2015 and has
served as an independent director on Alliance's board of directors.
Akumin has obtained voting support agreements in respect of the
election of the three additional nominees from certain shareholders
and persons who will become shareholders after giving effect to the
issuance of shares to be issued in connection with the acquisition
and related financing arrangements.
Each of the existing directors of Akumin are expected to
continue to serve on the board, with Riadh
Zine becoming Chairman, Stan
Dunford becoming Chairman Emeritus and Murray Lee remaining the lead independent
director upon closing of the acquisition.
Financial Information
We previously announced, based on the last twelve months ended
March 31, 2021, the combined company
is expected to have pro forma revenue(1) in excess of
$730 million and pro forma adjusted EBITDA(1) in
excess of $210 million. Based on the financial information
filed in our public disclosure today and Akumin's previously filed
financial information, for the last twelve months ended
March 31, 2021, such pro forma
revenue would be $730 million and pro forma adjusted EBITDA
would be approximately $213 million. Akumin's revenue was
$247 million with adjusted EBITDA(2) of
$52 million, and Alliance's revenue was $483 million with adjusted EBITDA of
$117 million. On a combined basis, adjusted EBITDA is
comprised of each of Akumin's and Alliance's adjusted EBITDA,
expected cost synergies of $24
million, EBITDA(1) of $8
million from Akumin's previously announced acquisition in
Florida which closed May 1, 2021, and other management adjustments of
approximately $12 million, including
adjustments for Alliance's discontinued operations and Alliance's
2020 management incentive compensation. See "Non-GAAP Measures"
below.
(1) Non-GAAP financial measure. See
"Non-GAAP Measures" below, including a quantitative reconciliation
to the most directly comparable financial measure.
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(2) Non-GAAP financial measure. See
"Non-GAAP Measures" below. Additional information about this
measure, including a quantitative reconciliation to the most
directly comparable financial measure, can be found under the
heading titled "How We Assess the Performance of Our Business –
Non-GAAP Measures" in Akumin's Q1 2021 MD&A.
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About Akumin Inc.
Akumin Inc. is a leading provider of freestanding, fixed-site
outpatient diagnostic imaging services in the United States with a network of 137 owned
and/or operated imaging centers located in Florida, Texas, Pennsylvania, Delaware, Illinois, Kansas, Georgia, and Massachusetts. By combining our clinical
expertise with the latest advances in technology and information
systems, our centers provide physicians with imaging capabilities
to facilitate the diagnosis and treatment of diseases and disorders
and may reduce unnecessary invasive procedures, minimizing the cost
and amount of care for patients. Our imaging procedures include
MRI, CT, positron emission tomography (PET), ultrasound, diagnostic
radiology (X-ray), mammography, and other interventional
procedures, performed with the help of over 1,500 team members. For
more information, visit www.akumin.com.
About Alliance HealthCare Services, Inc.
Alliance HealthCare Services is a leading national provider of
outsourced advanced radiology and radiation therapy services across
45 states in the U.S. Alliance partners with more than 1,000
hospitals, health systems and physician practices to provide a full
continuum of solutions, including onsite outpatient services and
comprehensive service line management. Alliance's ~2,100 Team
Members deliver exceptional customer and patient care via more than
500 diagnostic radiology and radiation therapy systems. For more
information, visit www.alliancehealthcareservices-us.com.
Forward-Looking Information
Certain information in this press release constitutes
forward-looking information. In some cases, but not necessarily in
all cases, forward-looking information can be identified by the use
of forward-looking terminology such as "plans", "targets",
"expects" or "does not expect", "is expected", "is positioned",
"estimates", "intends", "assumes", "anticipates" or "does not
anticipate" or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might", "will" or "will be taken", "occur" or "be
achieved". In addition, any statements that refer to expectations,
projections or other characterizations of future events or
circumstances contain forward-looking information. Statements
containing forward-looking information are not historical facts but
instead represent management's expectations, estimates and
projections regarding future events.
Forward-looking information is necessarily based on a number of
opinions, assumptions and estimates that, while considered
reasonable by Akumin as of the date of this press release, are
subject to known and unknown risks, uncertainties, assumptions and
other factors that may cause the actual results, level of activity,
performance or achievements to be materially different from those
expressed or implied by such forward-looking information,
including, but not limited to, the factors described in greater
detail in the "Risk Factors" section of Akumin's Annual Information
Form dated March 31, 2021, which is
available at www.sedar.com and www.sec.gov. These factors are not
intended to represent a complete list of the factors that could
affect Akumin; however, these factors should be considered
carefully. There can be no assurance that such estimates and
assumptions will prove to be correct. The forward-looking
statements contained in this press release are made as of the date
of this press release, and Akumin expressly disclaims any
obligation to update or alter statements containing any
forward-looking information, or the factors or assumptions
underlying them, whether as a result of new information, future
events or otherwise, except as required by law.
Non-GAAP Measures
This press release refers to certain non-GAAP measures. These
non-GAAP measures are not recognized measures under United States generally accepted accounting
principles ("GAAP") and do not have a standardized meaning
prescribed by GAAP. There is unlikely to be comparable or similar
measures presented by other companies. Rather, these non-GAAP
measures are provided as additional information to complement those
GAAP measures by providing further understanding of our results of
operations from management's perspective. Accordingly, these
non-GAAP measures should not be considered in isolation nor as a
substitute for analysis of our financial information reported under
GAAP. These non-GAAP measures are used to provide investors with
supplemental measures of our operating performance and thus
highlight trends in our core business that may not otherwise be
apparent when relying solely on GAAP measures. We believe the use
of these non-GAAP measures, along with GAAP financial measures,
enhances the reader's understanding of our operating results and is
useful to us and to investors in comparing performance with
competitors, estimating enterprise value, and making investment
decisions. We also believe that securities analysts, investors, and
other interested parties frequently use non-GAAP measures in the
evaluation of issuers. Our management uses non-GAAP measures to
facilitate operating performance comparisons from period to period,
to prepare annual operating budgets and forecasts and to determine
components of management compensation.
Non-GAAP financial measures presented in this press release are
as follows:
"EBITDA" means net income (loss)
attributable to shareholders of Akumin before interest expense
(net), income tax expense (benefit) and depreciation and
amortization.
"Adjusted EBITDA" means EBITDA, as
further adjusted for stock-based compensation, impairment of
property and equipment, provisions for certain credit losses,
settlement costs, provisions, acquisition-related and public
offering costs, gains (losses) in the period, deferred rent expense
(credit) and one-time adjustments.
The following table reconciles pro forma revenue and pro forma
adjusted EBITDA to the most directly comparable GAAP financial
performance measure:
Akumin:
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Year ended
December 31,
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Three-month
period
ended March 31,
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Twelve Month
period ended
March 31,
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2020
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2019
|
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2021
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2020
|
|
2021
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Revenue
|
251,283
|
247,436
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|
66,889
|
71,262
|
|
246,910
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|
|
|
|
|
|
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Net income (loss)
attributable
|
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|
|
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|
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to shareholders of
Akumin
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(20,398)
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9,428
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|
681
|
2,235
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(21,952)
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Income tax provision
(benefit)
|
(5,750)
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3,736
|
|
281
|
445
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(5,914)
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Depreciation and
amortization
|
20,460
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15,587
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5,576
|
4,987
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|
21,049
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Interest
expense
|
32,781
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20,783
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|
8,368
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7,462
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|
33,687
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EBITDA
|
27,093
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49,534
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|
14,906
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15,129
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|
26,870
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Adjustments:
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Stock-based
compensation
|
2,084
|
3,555
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|
427
|
593
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1,918
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Settlement costs
(recoveries)
|
2,324
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(1,881)
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(24)
|
356
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1,944
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Acquisition-related
costs
|
1,079
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3,403
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|
1,279
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219
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|
2,139
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Operational financial
instrument revaluation and other (gains) losses
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(3,908)
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1,017
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90
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(6,267)
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2,449
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Other financial
instruments revaluation and other (gains) losses
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22,079
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1,806
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(3,365)
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4,263
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14,451
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Deferred rent expense
(credit)(1)
|
2,953
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2,380
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445
|
675
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2,723
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Adjusted
EBITDA
|
53,704
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59,814
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13,758
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14,968
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52,494
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Alliance:
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Year ended
December 31,
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Three-month
period
ended March 31,
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Twelve Month
period ended
March 31,
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2020
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2019
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2021
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2020
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2021
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Revenue
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496,208
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569,388
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119,513
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132,405
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483,316
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Net loss
attributable to Alliance HealthCare Services, Inc.
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(63,409)
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(43,135)
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(9,907)
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(11,566)
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(61,750)
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Income tax expense
(benefit)
|
264
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(6,090)
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-
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38
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226
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Net income
attributable to non-controlling interest
|
12,132
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18,657
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3,895
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4,727
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|
11,300
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Interest expense,
net
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56,481
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56,187
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15,963
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13,199
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|
59,245
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Depreciation
expense
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54,870
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59,113
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12,721
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13,860
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53,731
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Amortization
expense
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12,240
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12,650
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2,490
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3,134
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|
11,596
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Transaction
Costs
|
1,358
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12,944
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|
704
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514
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1,548
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Restructuring
charges
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1,124
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6,216
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|
609
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136
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|
1,597
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Impairment
charges
|
29,580
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5,365
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-
|
-
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29,580
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Severance and related
costs
|
1,870
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2,917
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|
129
|
537
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1,462
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Loss on
extinguishment or modification of debt
|
14,614
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-
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-
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-
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14,614
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Legal matters and
other expenses (included in "Selling, general and administrative
expenses")
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6,465
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3,320
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2,233
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1,447
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7,251
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Share-based
compensation (included in "Selling, general and administrative
expenses")
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475
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507
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110
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112
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473
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Other charges
(benefits), net (included in "Other income, net")
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(2,275)
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463
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|
97
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45
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(2,223)
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Adjusted
EBITDA
|
125,789
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129,114
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29,044
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26,183
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128,650
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Less: net income
attributable to non-controlling interest
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(12,132)
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(18,657)
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(3,895)
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(4,727)
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(11,300)
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Adjusted EBITDA,
net of non-controlling interest
|
113,657
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110,457
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25,149
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21,456
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117,350
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Pro forma
Twelve Month
period ended
March 31,
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2021
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Akumin revenue
(per above)
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246,910
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Alliance revenue
(per above)
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483,316
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Pro forma
revenue
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730,226
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Akumin Adjusted
EBITDA (per above)
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52,494
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Alliance Adjusted
EBITDA, net of non-controlling interest (per above)
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117,350
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Sub-total
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169,844
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Synergies
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23,603
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EBITDA from
acquisition of six imaging clinics in Florida
(2)
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7,573
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Other management
adjustments
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12,262
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Pro forma Adjusted
EBITDA
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213,282
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(1) Based on
note 7 of the Company's Q1 2021 Financial Statements; Deferred rent
expense (credit) is defined as operating lease cost less operating
cash flows from operating leases.
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(2) See
Akumin's press release issued May 3, 2021.
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SOURCE Akumin Inc.