ALHAMBRA, Calif., Sept. 11, 2019 /PRNewswire/ -- Apollo Medical
Holdings, Inc. ("ApolloMed" or the "Company") (NASDAQ: AMEH), an
integrated population health management company, today announced
that it has closed a new credit facility. The new aggregate
$290 million credit facility consists
of a $190 million senior secured term
loan and a $100 million revolving
credit facility, among other facilities, that will mature in 2024.
The initial pricing of the term loan is LIBOR plus 2.50%. SunTrust
Robinson Humphrey, Inc served as left lead arranger and SunTrust
Bank is acting as administrative agent for the facility.
Additionally, Preferred Bank, J.P. Morgan Chase, MUFG Union Bank,
N.A., and Royal Bank of Canada
served as joint lead arrangers and joint bookrunners for the
syndicate. ApolloMed has also completed the series of transactions
with two of its affiliates, AP-AMH Medical Corporation, a
California professional medical
corporation ("AP-AMH"), and Allied Physicians of California, a Professional Medical
Corporation, a California
professional medical corporation d.b.a. Allied Pacific of
California IPA ("APC").
"We are extremely excited to announce this new credit facility
which enables us to complete our previously announced transaction
with APC and provides an initial $40
million of availability on our revolving credit facility as
the potential dry powder to pursue future acquisitions of
additional independent practice associations ('IPAs') by leveraging
our strong balance sheet to create additional shareholder value,"
said Kenneth Sim, M.D., Executive
Chairman of ApolloMed. "The closing of the APC transaction will
immediately improve ApolloMed's bottom line net income in 2019 and,
we expect, in future years. Aggregated with our recent synergistic
acquisitions of Accountable Health Care IPA and Alpha Care Medical
Group, both immediately increasing our revenue in 2019 and, we
expect in future years, our team is laser focused on both
significant near-term and long-term growth opportunities. We
believe the combination of these recent transactions solidifies our
position as a best-in-class, patient-centered and
physician-centric, value-based, integrated healthcare delivery
system and management company. The overwhelming support of the debt
capital markets evidenced by the participation of the top-tier
lenders in our credit facility is a testament to the growing
financial stability of our distinctive physician driven business
model that is leading the healthcare industry in value-based care,
by reducing the cost of healthcare while producing high quality
outcomes."
Initial funding from the new loan facility allows the Company to
refinance its current outstanding debt and allows the Company to
complete the series of agreements with two of its affiliates,
AP-AMH, and APC. The transactions, all of which are interrelated
and closed concurrently with the closing of the new credit
facility, include the following:
- The Company is lending AP-AMH $545,000,000 pursuant to a ten-year secured loan
agreement. The loan will bear interest at a rate of 10% per annum
simple interest.
- AP-AMH is purchasing $545,000,000
of Series A Preferred Stock to be issued by APC to AP-AMH. Under
the terms of the Series A Preferred Stock, AP-AMH is entitled to
receive preferential, cumulative dividends that accrue on a daily
basis and that are equal to the sum of (A) APC's net income from
healthcare services, plus (B) any dividends received by APC from
certain of APC's affiliated entities, less (C) any retained
amounts.
- APC is purchasing $300,000,000 of the Company's common
stock.
- The Company is licensing certain of its trademarks to AP-AMH
for a fee equal to a percentage of the aggregate gross revenues of
AP-AMH. The license fee is payable out of any Series A Preferred
Stock dividends received by AP-AMH from APC.
- Through its subsidiary, the Company will provide certain
administrative services to AP-AMH for a fee equal to a percentage
of the aggregate gross revenues of AP-AMH. The administrative fee
also is payable out of any APC Series A Preferred Stock dividends
received by AP-AMH from APC.
- The net effect of the series of transactions announced today is
a significant improvement in our net income in 2019 and, we expect,
in future years.
Note About Consolidated Entities
The Company consolidates entities in which it has a controlling
financial interest. The Company consolidates subsidiaries in which
it holds, directly or indirectly, more than 50% of the voting
rights, and variable interest entities ("VIEs") in which the
Company is the primary beneficiary. Noncontrolling interests
represent equity ownership interests in the Company's consolidated
entities (including certain VIEs). The amount of net (loss) income
attributable to noncontrolling interests is disclosed in the
Company's consolidated statements of income.
About Apollo Medical Holdings, Inc.
ApolloMed is a leading physician-centric integrated population
health management company, which, together with its subsidiaries,
including a Next Generation Accountable Care Organization
("NGACO"), and its affiliated IPAs and management services
organizations ("MSOs"), are working to provide coordinated,
outcomes-based high-quality medical care for patients, particularly
senior patients and patients with multiple chronic conditions, in a
cost-effective manner. ApolloMed focuses on addressing the
healthcare needs of its patients by leveraging its integrated
health management and healthcare delivery platform that includes
Network Medical Management, Inc. (an MSO), Apollo Medical
Management, Inc. (an MSO), ApolloMed Hospitalists, APA ACO,
Inc. (the Company's NGACO), APC (an IPA) and Apollo Care Connect,
Inc. (the Company's digital population health management
platform). For more information, please
visit www.apollomed.net.
About Allied Physicians of California
APC is an IPA that the Company has determined should be
consolidated as a VIE with the Company's financial statements under
United States generally accepted
accounting principles (U.S. GAAP). APC-LSMA has as its sole
shareholder, Thomas Lam, M.D., Chief
Executive Officer of the Company and Chief Executive Officer and
Chief Financial Officer of APC, and is a consolidated VIE of APC.
APC-LSMA acquired 100% capital stock of Alpha Care Medical Group on
May 31, 2019 and the remaining 75% of
Accountable Health Care IPA capital stock on August 30, 2019. Upon consummation of the
acquisitions, both of these IPAs are consolidated VIEs of APC
through APC-LSMA.
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended, such as statements about the Company's
acquisition strategy, integration of its acquired companies,
continued growth and business outlook, ability to deliver
sustainable long-term value, ability to respond to the changing
environment, operational focus and strategic growth
plans. Forward-looking statements reflect current views with
respect to future events and financial performance and therefore
cannot be guaranteed. Such statements are
based on the current expectations and certain assumptions
of the Company's management, and some or all of such expectations
and assumptions may not materialize or may vary significantly from
actual results. Actual results may also vary materially from
forward-looking statements due to risks, uncertainties and other
factors, known and unknown, including the risk factors described
from time to time in the Company's reports to the SEC, including,
without limitation, the risk factors discussed in
the Company's Annual Report on Form 10-K filed
with the SEC on March 18, 2019 and in the Company's Quarterly
Report on Form 10-Q filed with the SEC on August 9, 2019.
FOR MORE INFORMATION, PLEASE CONTACT:
Asher Dewhurst
(443) 213-0500
asher.dewhurst@westwicke.com
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SOURCE Apollo Medical Holdings, Inc.