Salona Global Medical Device Corporation (“
Salona
Global,” “
SGMD,” or the
“
Company”) (TSXV:SGMD) has executed a definitive
asset purchase agreement (the “
Asset
Purchase Agreement”) to acquire
the physical medicine assets (the “
Acquired
Assets”) of Biodex Medical Systems, Inc.
(“
Biodex”). As part of the acquisition, at the
closing the parties will execute a two-year contract manufacturing
agreement (the “Supply Agreement”) with Biodex, which together with
the Acquired Assets are expected to generate $26 million annually.
The trailing 12-month revenues for the Acquired Assets were $18
million with gross margins of approximately 30%. The Supply
Agreement is expected to generate 15% gross margins. Between cash,
assets on the balance sheet and its existing debt facility the
Company has sufficient funds to close the acquisition.
A global brand in physical therapy clinics,
Biodex offers high tech medical devices to improve patients’
mobility, balance and strength. The acquisition would build upon
SGMD’s strategy to create a fully integrated global medical device
company as well as adding a well-known global brand of devices to
the Company. The Company is planning a cross-selling strategy
post-acquisition with the aim to increase revenues by offering its
Mio-Guard athletic training market products to the large existing
Biodex customer list while offering the Biodex products into the
Company’s current sales channels.
Under the terms of the Asset Purchase Agreement
signed and dated on November 29, 2022, an indirect wholly owned
subsidiary of Salona Global (the “Salona Global Buyer”) will
acquire the Acquired Assets, including Biodex’s brand and all
intellectual property for the physical therapy and athletic
industries, including inventory. The consideration for the Acquired
Assets is US$5 million in cash at closing and up to an additional
US$3 million in deferred cash payments contingent on performance of
the Acquired Assets during the 12 -month period following closing.
The acquisition is subject to customary closing conditions as set
forth in the Asset Purchase Agreement.
“This deal looks to add significant revenue and
gross profits to Salona Global with no added dilution,” said Salona
Global Executive Chairman Les Cross. “It is a transformational deal
for us as it gives us a global brand and significant further
distribution, solidifying our standing within the physical therapy
clinic and athletic training room. The acquisition would increase
our revenues and profits to a level where we can start considering
an application for listing on the Nasdaq market in the U.S. We
continue our efforts in driving the five engines of revenue and
profit growth bringing more momentum to our fast-growing company:
Acquisitions, internal sales force recruitment, product
development, in-licensing product IP, and sales distribution
agreements.”
“We invested significantly in pre-integration
expenses over the past few months and are well positioned to drive
revenue growth and margins as we integrate this brand into our
portfolio in 2023,” said Salona Global CEO Luke Faulstick. “Our
plan is to introduce the acquired Biodex suite of products into the
athletic training and physical therapy markets through existing
distribution. We will also be looking to gain revenues by cross
selling Mio-Guard products into the existing Biodex distribution
channel. While we have spent time and energy on this deal, we have
a large pipeline of other deals I feel optimistic about as we look
beyond this deal.”
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For more information please contact:
Luke FaulstickChief Executive Officer Tel: 1 (800)
760-6826Email: Info@Salonaglobal.com
About Biodex Medical Systems
Biodex Medical Systems, Inc. is part of Mirion Medical, Inc., a
group of healthcare-focused brands within Mirion Technologies
(NYSE: MIR). Mirion Technologies, Inc. uses science and technology
to drive treatment innovation across physical medicine, nuclear
medicine and medical imaging categories. With a history of
manufacturing and engineering excellence that spans more than 60
years, the Biodex™ mission is to provide innovative solutions and
customer-driven support to medical facilities and wellness centers
around the globe. Visit us: Biodex.com and mirion.com.
Additional Information
There can be no assurance that any acquisition
(including the acquisition contemplated herein and the targets
Salona Global is currently negotiating within its pipeline) will be
completed or the timing of any acquisitions. Completion of any
transaction will be subject to, amongst other things, negotiation
and execution of definitive agreements, applicable director,
shareholder and regulatory approvals.
Readers are cautioned that the financial
information regarding the Acquired Assets disclosed herein is
unaudited and derived as a result of the Company’s due diligence
investigation of the financial records pertaining to the Acquired
Assets.
Neither the TSXV nor its Regulation Services
Provider (as that term is defined in the policies of the TSXV)
accepts responsibility for the adequacy or accuracy of this
release.
Unless otherwise specified, all dollar amounts
in this press release are expressed in Canadian dollars.
Certain statements contained in this press
release constitute "forward-looking information" within the meaning
of the Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities laws. These statements can be
identified by the use of forward-looking terminology such as
“expects” “believes”, “estimates”, "may", "would", "could",
"should", "potential", "will", "seek", "intend", "plan", and
"anticipate", and similar expressions as they relate to the
Company, including: the Company closing the acquisition disclosed
herein; the performance of the Acquired Assets post-closing,
including the Company expecting generation of an additional $26
million annually; the Company’s plans to finance the acquisition;
and the Company’s expectations for the financial implications of
the acquisitions. All statements other than statements of
historical fact may be forward-looking information. Such statements
reflect the Company's current views and intentions with respect to
future events, and current information available to the Company,
and are subject to certain risks, uncertainties and assumptions,
including: the Acquired Assets achieving results at least as good
as their historical performance; the financial information
regarding the Acquired Assets being verified when included in the
Company’s consolidated financial statements prepared in accordance
with GAAP; the Company receiving all necessary approvals for the
acquisitions; and all conditions to closing the acquisition of the
Acquired Assets being satisfied or waived. Salona Global cautions
that the forward-looking statements contained herein are qualified
by important factors that could cause actual results to differ
materially from those reflected by such statements. Such factors
include but are not limited to the general business and economic
conditions in the regions in which Salona Global operates; Salona
Global not receiving the necessary approvals to close an
acquisition; the ability of Salona Global to execute on key
priorities, including the successful completion of acquisitions,
business retention, and strategic plans and to attract, develop and
retain key executives; difficulty integrating newly acquired
businesses; the ability to implement business strategies and pursue
business opportunities; disruptions in or attacks (including
cyber-attacks) on Salona Global’s information technology, internet,
network access or other voice or data communications systems or
services; the evolution of various types of fraud or other criminal
behavior to which Salona Global is exposed; the failure of third
parties to comply with their obligations to Salona Global or its
affiliates; the impact of new and changes to, or application of,
current laws and regulations; granting of permits and licenses in a
highly regulated business; the overall difficult litigation
environment, including in the United States; increased competition;
changes in foreign currency rates; increased funding costs and
market volatility due to market illiquidity and competition for
funding; the availability of funds and resources to pursue
operations; critical accounting estimates and changes to accounting
standards, policies, and methods used by Salona Global; the
occurrence of natural and unnatural catastrophic events and claims
resulting from such events; and risks related to COVID-19 including
various recommendations, orders and measures of governmental
authorities to try to limit the pandemic, including travel
restrictions, border closures, non-essential business closures,
quarantines, self-isolations, shelters-in-place and social
distancing, disruptions to markets, economic activity, financing,
supply chains and sales channels, and a deterioration of general
economic conditions including a possible national or global
recession; as well as those risk factors discussed or referred to
in Salona Global’s disclosure documents filed with United States
Securities and Exchange Commission and available at
www.sec.gov, and with the securities regulatory authorities in
certain provinces of Canada and available at
www.sedar.com. Should any factor affect Salona Global in an
unexpected manner, or should assumptions underlying the
forward-looking information prove incorrect, the actual results or
events may differ materially from the results or events predicted.
Any such forward-looking information is expressly qualified in its
entirety by this cautionary statement. Moreover, Salona Global does
not assume responsibility for the accuracy or completeness of such
forward-looking information. The forward-looking information
included in this press release is made as of the date of this press
release and the Company undertakes no obligation to publicly update
or revise any forward-looking information, other than as required
by applicable law.
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