American Shared Hospital Services Announces Acquisition of Gamma Knife Center, Ecuador S.A.
June 18 2020 - 8:00AM
via NEWMEDIAWIRE -- American Shared Hospital Services (NYSE
American: AMS) ("AMS"), a leading provider of turnkey technology
solutions for advanced radiosurgical and radiation therapy
services, today announced that its 81% owned subsidiary, GK
Financing, LLC (“GKF”), has completed the acquisition of
approximately 98% of the total outstanding shares of Gamma Knife
Center Ecuador S.A. (“GKC Ecuador”) purchased from GKC Ecuador's
majority shareholders Global Medical Investments GMI AB,
Scandinavian Care Investments AB, and Brock Investment Limited (the
"Acquisition”). At a later date, AMS plans to acquire the remaining
outstanding shares of GKC Ecuador by entering into a separate stock
purchase agreement with the remaining minority shareholders of GKC
Ecuador.
The total purchase price for the Acquisition,
including acquisition of the minority shares is expected to be
approximately $2.0 million, or about 1x historical annual revenue
of GKC Ecuador. This purchase price has been paid with $575,000 in
cash and a $1.425 million loan from the United States International
Development Finance Corporation (“DFC”). The purchase price
is subject to certain post-closing adjustments, including
adjustment for GKC Ecuador's working capital and excess cash.
The DFC loan is denominated in U.S. dollars, which is also the
currency of Ecuador.
GKC Ecuador is a well-established Gamma Knife
operation founded in 2009 as a private clinic to introduce advanced
stereotactic radiosurgery into Ecuador. GKC Ecuador's center is
located in Ecuador’s largest city, Guayaquil, which has a
population of nearly 2.5 million people. Ecuador has a total
population of approximately 16 million people. Sixty, or 30%, of
the approximately 200 neurosurgeons practicing in Ecuador have
referred patients to the center, which has treated over 1,400
patients to date.
GKC Ecuador was the first healthcare institution
to provide stereotactic radiosurgery in Ecuador and continues to
operate the only Gamma Knife unit in the country. GKC Ecuador owns
its facilities which are adjacent to Hospital Alcívar, one of
Ecuador’s leading healthcare providers.
"The accretive acquisition of GKC Ecuador is a
great fit for AMS and a further diversification of our business
model that provides us with an additional revenue stream for future
growth. Located not far from our Gamma Knife Center in Peru, the
acquisition also meshes well with our strategy to expand further
into international markets,” commented Ray Stachowiak, Interim
President and Chief Executive Officer of AMS. “Looking ahead, we
believe that there is a large opportunity to increase GKC Ecuador’s
patient volumes by expanding coverage to include Ecuador’s growing
segment of private patients with health insurance provided by
employers, further expanding the center’s public sector reach and
increasing the number of referral sources.”
GKC Ecuador currently operates a Leksell Gamma
Knife model 4C which is under contract to be upgraded to a Gamma
Knife Perfexion ("Perfexion"). The Perfexion is expected to
be installed in late 2020 or early 2021. The Perfexion system
allows for greater ease of use, faster treatment times and can
treat a wider range of anatomical structures, all of which can
drive higher patient volume. “When this upgrade is complete,
GKC Ecuador will be one of the few centers offering this gold
standard technology in all of South America,” added Ernest R.
Bates, VP of Sales and Business Development at AMS.
About American Shared Hospital Services (NYSE American:
AMS)
American Shared Hospital Services provides
turnkey technology solutions for advanced radiosurgical and
radiation therapy services. AMS is the world leader in providing
Gamma Knife radiosurgery equipment, a non-invasive treatment for
malignant and benign brain tumors, vascular malformations, and
trigeminal neuralgia (facial pain). The Company also offers proton
therapy, and the latest IGRT, IMRT and MR/LINAC systems. For more
information, please visit: www.ashs.com.
Safe Harbor Statement
This press release may be deemed to contain
certain forward-looking statements with respect to the financial
condition, results of operations, the future plans of American
Shared Hospital Services (including statements regarding the
expected continued growth of the Company the Company's expansion
into new markets, the Company's Future acquisitions and potential
market segments for its products and the expansion of the Company's
Gamma Knife, proton therapy and MR/LINAC business), which involve
risks and uncertainties including, but not limited to, the risks of
variability of financial results between quarters, the risks of the
Gamma Knife and proton therapy businesses, the risks of developing
The Operating Room for the 21st Century program, the risks of
changes to CMS reimbursement rates or reimbursement methodology,
the risks of the timing, financing, and operations of the Company's
Gamma Knife, proton therapy, MR/LINAC businesses, the risks of the
COVID-19 pandemic and its effect on the Company's business
operations and financial condition, the risk that the Company will
be unable to conduct an effective executive search, the risk that
the Company will be unable to identify and attract a permanent
successor to the Company's President and Chief Executive Officer,
the risk of expanding within or into new markets, the risk that
integration or continued operation of acquired businesses could
adversely affect financial results and the risk that current and
future acquisitions may negatively affect our financial position.
Further information on potential factors that could affect the
financial condition, results of operations and future plans of
American Shared Hospital Services are included in the filings of
the Company with the Securities and Exchange Commission, including
the Company's Annual Report on Form 10-K for the year ended
December 31, 2019, its Quarterly Report on Form 10-Q for the
quarter ended March 31, 2020, and the definitive Proxy Statement
for the Annual Meeting of Shareholders to be held on June 26,
2020.
Contacts:
American Shared Hospital ServicesRay StachowiakInterim President
and Chief Executive Officerp. (415)788-5300rstachowiak@ashs.com
Investor RelationsPCG AdvisoryStephanie PrinceP: (646)
762-4518sprince@pcgadvisory.com
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