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EX-1.01 - PURCHASE AGREEMENT - CROSS COUNTRY HEALTHCARE INC | ccrn_ex101.htm |
8-K - CURRENT REPORT - CROSS COUNTRY HEALTHCARE INC | ccrn_8k.htm |
Exhibit 99.1
Cross Country Healthcare To Acquire Assets of Advantage
RN
BOCA
RATON, Fla. — (BUSINESS WIRE)—June 13, 2017 -- Cross
Country Healthcare, Inc. (NASDAQ:CCRN), a leading provider of
healthcare staffing and workforce solutions, announced today that
it has signed a definitive agreement to acquire substantially all
of the assets and business of Advantage RN and its affiliates
(collectively, “Advantage”) for an aggregate purchase
price of $88 million, subject to a post-closing working capital
adjustment.
Founded
in 2003 and headquartered in West Chester, Ohio, Advantage is one
of the largest independent travel nurse staffing companies in the
United States. Advantage deploys many of its nurses through Managed
Service Providers and Vendor Management Systems and maintains
strong direct relationships with many hospitals. The founder and
CEO of Advantage, Matt Price, will remain with the business after
the transaction closes. For the year ended December 31, 2016
Advantage had revenue of approximately $100 million and a
normalized EBITDA (refer to Non-GAAP financial measures below for
definition) of approximately $10.0 million.
Cross
Country Healthcare President and CEO William J. Grubbs said,
“The acquisition of Advantage’s business represents a
strategically compelling opportunity for Cross Country Healthcare
to increase our supply of healthcare professionals, expand our
capture rate at our Managed Service Providers accounts, and expand
our Workforce Solutions business by offering our full suite of
services to certain of Advantage’s clients. From a financial
perspective, we expect this transaction to create significant value
for our shareholders and meaningful earnings accretion in 2017
through increased scale and accelerated growth
opportunities.”
The
Company is financing the acquisition through a combination of
cash-on-hand and borrowings under its senior credit facility. In
connection with this transaction, the Company has also entered into
a commitment to increase the borrowing capacity under its current
credit facility by $40 million.
It is
anticipated that the closing will occur during the third quarter of
2017, the consummation of which is subject to customary closing
conditions.
The
foregoing description does not purport to be complete and is
qualified in its entirety by reference to the full text of the
Purchase Agreement that will be filed as Exhibit 1.01 to our Form
8-K.
ABOUT CROSS COUNTRY HEALTHCARE
Cross
Country Healthcare is a national leader in providing innovative
healthcare workforce solutions and staffing services. Our solutions
leverage our nearly 40 years of expertise and insight to assist
clients in solving complex labor-related challenges while
maintaining high quality outcomes. We are dedicated to recruiting
and placing highly qualified healthcare professionals in virtually
every specialty and area of expertise. With more than 9,500 active
contracts, our diverse client base includes both clinical and
nonclinical settings, servicing acute care hospitals, physician
practice groups, outpatient and ambulatory-care centers, nursing
facilities, both public schools and charter schools, rehabilitation
and sports medicine clinics, government facilities, and homecare.
Through our national staffing teams and network of 74 office
locations, we are able to place clinicians on travel and per diem
assignments, local short-term contracts and permanent positions. We
are a market leader in providing flexible workforce management
solutions, which include managed services programs (MSP), internal
resource pool consulting and development, electronic medical record
(EMR) transition staffing, recruitment process outsourcing,
predictive modeling and other outsourcing and consultative
services. In addition, we provide both retained and contingent
placement services for healthcare executives, physicians, and other
healthcare professionals.
Copies
of this and other news releases as well as additional information
about Cross Country Healthcare can be obtained online at
www.crosscountryhealthcare.com.
Shareholders and prospective investors can also register to
automatically receive the Company's press releases, SEC filings and
other notices by e-mail.
NON-GAAP FINANCIAL MEASURES
This
press release references normalized EBITDA, a non-GAAP financial
measure. Such non-GAAP financial measure is provided as additional
information and should not be considered a substitute for, or
superior to, financial measures calculated in accordance with U.S.
GAAP. The Company defines normalized EBITDA as earnings before
interest, income taxes, depreciation and amortization of the
acquired company adjusted for items that have been identified in
its due diligence process as items that are not expected to reoccur
post acquisition. Management believes this non-GAAP measure is
useful to investors as it is consistent with the measure it uses to
evaluate its transactions. This non-GAAP financial measure may
differ materially from the same non-GAAP financial measure used by
other companies. The table that follows provides a reconciliation
to the most directly comparable U.S. GAAP financial measure and
includes a more detailed discussion of the financial
measure:
Reconciliation of Normalized EBITDA
|
|
|
|
|
|
Advantage
|
Year Ended
|
|
December 31, 6201
|
|
(in thousands)
|
|
|
Net
income
|
$8,535
|
Depreciation
& Amortization
|
122
|
Interest
expense
|
192
|
Legal
fees (a)
|
462
|
Transaction
related costs (b)
|
136
|
Restructuring
costs
|
88
|
Other
non-recurring adjustments ©
|
435
|
Normalized
EBITDA
|
$9,970
|
(a)
Legal fees relate
to a specific liability the Company is not assuming in accordance
with the terms of the asset purchase agreement.
(b)
Transaction related
costs are fees incurred by the Seller pertaining to the sale of
business.
(c)
Other non-recurring
adjustments are costs that are not anticipated to continue post
acquisition such stock purchase distributions, board expenses, and
certain other non-operating or immaterial prior period
adjustments.
FORWARD LOOKING STATEMENT
In addition to historical information, this press release contains
statements relating to our future results (including certain
projections and business trends) that are "forward-looking
statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and are subject to the
"safe harbor" created by those sections. Forward-looking statements
consist of statements that are predictive in nature, depend upon or
refer to future events. Words such as "expects", "anticipates",
"intends", "plans", "believes", "estimates", "suggests", "appears",
"seeks", "will" and variations of such words and similar
expressions intended to identify forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results
and performance to be materially different from any future results
or performance expressed or implied by these forward-looking
statements. These factors include, without limitation, the
following: our ability to attract and retain qualified nurses,
physicians and other healthcare personnel, costs and availability
of short-term housing for our travel nurses and physicians, demand
for the healthcare services we provide, both nationally and in the
regions in which we operate, the functioning of our information
systems, the effect of cyber security risks and cyber incidents on
our business, the effect of existing or future government
regulation and federal and state legislative and enforcement
initiatives on our business, our clients' ability to pay us for our
services, our ability to successfully implement our acquisition and
development strategies, including our ability to successfully
integrate acquired businesses and realize synergies from such
acquisitions, the effect of liabilities and other claims asserted
against us, the effect of competition in the markets we serve, our
ability to successfully defend the Company, its subsidiaries, and
its officers and directors on the merits of any lawsuit or
determine its potential liability, if any, and other factors set
forth in Item 1A. "Risk Factors" in the Company's Annual Report on
Form 10-K for the year ended December 31, 2016, and our
other Securities and Exchange Commission filings made prior to the
date hereof.
Although we believe that these statements are
based upon reasonable assumptions, we cannot guarantee future
results and readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's
opinions only as of the date of this press release. There can be no
assurance that (i) we have correctly measured or identified
all of the factors affecting our business or the extent of these
factors' likely impact, (ii) the available information with
respect to these factors on which such analysis is based is
complete or accurate, (iii) such analysis is correct or
(iv) our strategy, which is based in part on this analysis,
will be successful. The Company undertakes no obligation to update
or revise forward-looking statements. All references to "we," "us,"
"our," or "Cross Country" in this press release mean Cross Country
Healthcare, Inc., its subsidiaries and
affiliates.
Cross
Country Healthcare, Inc.
William
J. Grubbs, 561-237-6202
President
and Chief Executive Officer
wgrubbs@crosscountry.com
Source:
Cross Country Healthcare, Inc.