NEW YORK and CHENNAI, India, Aug. 2,
2018 /PRNewswire/ -- Constellation Alpha Capital Corp.
(NASDAQ: CNAC) ("Constellation"), a special purpose acquisition
company focused on consolidating the healthcare services sector in
India, announced that it has
executed a definitive agreement to acquire Medall Healthcare
Private Limited ("Medall"), a leading integrated pathology and
radiology company at an enterprise value of INR 14.5 billion
(approximately US$212 million based
on an assumed USD/INR exchange rate of US$1.00 to INR 68.4). This will be the largest
investment in an Indian diagnostics company to date. As of the date
of this announcement, subject to closing, Constellation is expected
to be the only India-focused
healthcare services company to be publicly listed outside of
India.
Medall is among India's leading
integrated pathology and radiology companies, providing over 25 million
diagnostic tests to over 9 million customers in its most recent
fiscal year. Since its inception, Medall has completed 24
acquisitions propelling its rise into the ranks of the top five
Indian diagnostics companies by revenue, all of which predate it by
at least 20 years. Between FY2013 and FY2018, Medall grew revenue
and adjusted EBITDA at an annual rate of 17% and 27% respectively
while adjusted EBITDA margins expanded from 19% in FY2013 to 28% in
FY2018.
The Indian economy is the 6th largest and the fastest
growing major economy in the world. Driven by fundamental shifts in
demographics, rising affluence and supportive government
regulations, the Indian healthcare sector is expected to continue
growing twice as fast as the Indian economy until 2025. The
diagnostics sector in India
accounts for nearly $10 billion in
annual revenue and is projected to continue growing at 20%
compounded annual growth rate until 2025. Unlike the U.S.
diagnostics industry where the top two players account for over 40%
revenue share of the independent (ex-hospital) laboratory market,
the Indian diagnostics industry is highly fragmented with the top
two players accounting for only approximately 6% of such revenues.
Constellation believes that this presents an opportunity to
consolidate the fragmented Indian healthcare diagnostics
market.
Mr. Rajiv Sarman Shukla, Chairman
and Chief Executive Officer of Constellation, said, "We are pleased
to begin our consolidation strategy with a market leader like
Medall. We look forward to growing the company through serial
acquisitions and organic levers."
Mr. Raju Venkataraman, founder of
Medall said, "The Medall team is excited to be part of the
continued growth of Medall with the vision to become the market
leader."
About Constellation Alpha Capital Corp.
Constellation,
a special purpose acquisition company, was formed by Mr.
Rajiv Sarman Shukla as a public
platform for acquiring Indian healthcare businesses. Constellation
raised $143.75 million in its initial
public offering in June 2017.
Additional information about Constellation is available at
www.ConstellationAlpha.com.
Key Transaction Terms
Under the terms of the
transaction, Constellation Health Holdings ("Holdco"), a wholly
owned Singapore subsidiary of
Constellation, will acquire 93% of the outstanding shares of Medall
at the closing for approximately US$166
million in cash (based on an assumed USD/INR exchange rate
of US$1.00 to INR 68.4), and the
remainder of the outstanding shares of Medall on June 30, 2019. It is anticipated that the
transaction will be funded by a combination of cash held in trust
by Constellation and new indebtedness. At the closing, Medall will
become a subsidiary of Constellation. At that time, Constellation
will be renamed Constellation Healthcare Corp. and is anticipated
to trade on the NASDAQ Capital Market under the ticker symbol
"COHC". The transaction, which has been approved by the Boards of
Directors of Constellation and Medall, is expected to close in the
fourth quarter of 2018. Closing is subject to approval by
Constellation's shareholders and the satisfaction of other
customary closing conditions. Constellation received financial and
capital markets advice from Cowen and Company and Edelweiss
Financial Services Limited. Greenberg Traurig, LLP and Khaitan and
Co acted as legal counsel to Constellation. Medall is advised by
Moelis & Co. Luthra & Luthra acted as legal counsel to
Medall.
A full description of the transaction terms will be provided in
a proxy statement for the shareholders of Constellation to be filed
with the United States Securities and Exchange Commission ("SEC").
Constellation urges investors, shareholders and other interested
persons to read, when available, the proxy statement, as well as
other documents filed with the SEC, because these documents will
contain important information. The definitive proxy statement will
be mailed to shareholders of Constellation as of a record date to
be established for voting on the proposed business combination.
Shareholders will also be able to obtain a copy of the proxy
statement, without charge, by directing a request to: Constellation
Alpha Capital Corp., Emerald View,
Suite 400, 2054 Vista Parkway, West Palm
Beach, FL 33411. The preliminary and definitive proxy
statement, once available, can also be obtained, without charge, at
the SEC's internet site (www.sec.gov) and Constellation's
website.
Participants in the Solicitation
Constellation and
their respective directors and certain of their respective
executive officers may be considered participants in the
solicitation of proxies with respect to the proposed business
combination described in this press release under the rules of the
SEC. Information about the directors and executive officers of
Constellation is set forth in its Annual Report on Form 10-K for
the fiscal year ended March 31, 2018,
which was filed with the SEC on June 29,
2018.
Information regarding the persons who may, under the rules of
the SEC, be deemed participants in the solicitation of the
shareholders in connection with the proposed business combination
will be set forth in the proxy statement when it is filed with the
SEC. These documents can be obtained free of charge from the
sources indicated above.
Non-Solicitation
This press release is not a proxy
statement or solicitation of a proxy, consent or authorization with
respect to any securities or in respect of the proposed transaction
and shall not constitute an offer to sell or a solicitation of an
offer to buy the securities of Constellation, Holdco or Medall, nor
shall there be any sale of any such securities in any state or
jurisdiction in which such offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of such state or jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Investor Conference Call Scheduled
Constellation will
host an investor conference call to discuss the transaction on
August 3, 2018 at 1:00 p.m. EDT. Investors may listen to the
conference call by dialing 1-877-870-4263 toll free in the U.S. or
1-412-317-0790 internationally. A replay of the call will be
available beginning August 6, 2018 on
Constellation's website at www.ConstellationAlpha.com/ir.
Forward-Looking Statements
This press release includes
certain statements that are not historical facts but are
forward-looking statements for purposes of the safe harbor
provisions under the United States Private Securities Litigation
Reform Act of 1995. Forward-looking statements generally are
accompanied by words such as "believe," "may," "will," "estimate,"
"continue," "anticipate," "intend," "expect," "should," "would,"
"plan," "predict," "potential," "seem," "seek," "future,"
"outlook," and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
These forward-looking statements include, but are not limited to,
statements regarding current year adjusted EBITDA projections and
forecasts of other financial and performance metrics, projections
of market opportunity, macroeconomic outlook and the expected
benefits of the proposed business combination. These statements are
based on various assumptions and on the current expectations of
Constellation and Medall management and are not predictions of
actual performance. These forward-looking statements are subject to
a number of risks and uncertainties, including general economic,
political and business conditions in India; potential government
interventions resulting in changes to the Indian economy,
applicable taxes and tariffs, inflation, exchange rates, interest
rates and the regulatory environment; changes in the financial
condition of Medall's clients affecting their ability to pay for
its services; the results of competitive bidding processes, which
could lead to the loss of material contracts or curtail Medall's
expansion efforts; the outcome of judicial and administrative
proceedings to which Medall is or may become a party or
governmental investigations to which Medall may become subject that
could interrupt or limit Medall's operations, result in adverse
judgments, settlements or fines and create negative publicity;
changes in Medall's clients' preferences, prospects and the
competitive conditions prevailing in the Indian health care sector;
the inability of the parties to successfully or timely consummate
the proposed business combination, including the risk that any
required regulatory approvals are not obtained, are delayed or are
subject to unanticipated conditions that could adversely affect
Holdco or the expected benefits of the proposed business
combination or that the approval of the shareholders of
Constellation is not obtained; failure to realize the anticipated
benefits of the proposed business combination, including as a
result of a delay in consummating the proposed business combination
or a delay or difficulty in integrating the businesses of
Constellation and Medall; the amount of redemption requests made by
Constellation's shareholders; the ability of Constellation to
obtain debt financing; those factors discussed in Constellation's
Annual Report on Form 10-K for the fiscal year ended March 31, 2018 under the heading "Risk Factors,"
and other documents of Constellation filed, or to be filed, with
the SEC. These statements speak only as of the date they are made
and neither Constellation, Holdco nor Medall undertakes any
obligation to update any forward-looking statements contained
herein to reflect events or circumstances which arise after the
date of this press release.
Non-GAAP Financial Information
This press release
includes the presentation of adjusted EBITDA, which is a
supplemental measure of performance that is neither required by,
nor presented in accordance with, generally accepted accounting
principles or international financial reporting standards ("IFRS").
Non-GAAP financial measures do not have a standardized meaning, and
the definition of adjusted EBITDA used by Medall may be different
from other, similarly named non-GAAP measures used by Medall's
peers operating in the diagnostics industry. For a definition
of adjusted EBITDA used by Medall and a reconciliation of adjusted
EBITDA to the closest GAAP measure, please refer to the investor
presentation to be filed by Constellation with the SEC on Form
8-K.
Contact:
Craig Pollak,
Chief Financial Officer, cp@constellationalpha.com
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SOURCE Constellation Alpha Capital Corp.