Skylight Health Completes Largest
Acquisition to date and Enters Medicare Advantage Global
Risk
Skylight doubles top line revenue and adds
over 5,000 patient lives
- NeighborMD ("NMD") adds 9 practices across
Central and Southern Florida with over 2,400 owned and affiliated
global capitated risk lives. Unaudited trailing 12 months
(TTM) primary care revenue of US $35 million roughly evenly split
between owned and affiliate practices, which more than doubles
current Skylight revenue run rate.
- Secured US $20 million debt facility with New
York based lender All key leadership and operational teams will
continue with Skylight, bringing a successful 5-year track record
of generating a surplus under Medicare Advantage ("MA") risk
contracts
- Company plans to expand risk contracts to
existing Medicare members in Florida and expansion of payors with
the recent Joint Venture announcement with Collaborative Health
System
Toronto, Ontario, Canada -- May 6, 2022 -- InvestorsHub
NewsWire -- Skylight Health Group Inc. (NASDAQ:SLHG; TSXV:SLHG) ("Skylight Health" or the
"Company"), a multi-state primary care management group in the
United States, is pleased to announce that further to its
press release dated May 3, 2022, it has completed the deal to
acquire NeighborMD (NMD) with a debt facility of US $20
million.
"We are very pleased to close our largest acquisition to date,
and welcome the team at Neighbour MD into the Skylight Health
Group," says Prad Sekar, CEO an Co-Founder of Skylight Health. "Not
only does this more than double our revenue run rate and strengthen
our market share in Florida, but it also significantly accelerates
our entry into full-risk in 2022, as originally planned for 2025.
We are now strongly positioned with risk contracts to begin
focusing on our pipeline within Florida that will present Medicare
and MA growth."
Based in central and southern Florida, NMD operates 9 owned
practices offering primary care services to over 5,000 lives.
Within these, NMD has over 1,100 MA lives in full risk contracts
with two leading healthcare payors in the Florida, Humana and
CarePlus. In addition, NMD provides complete management services
for over 1,400 additional MA lives through its affiliated providers
and practices. NMD's existing contracts offer competitive
capitation fee schedules and allow for broad geographic coverage,
with over 30 Florida counties covered, including all counties in
which Company currently operates. Of the Medicare Advantage lives
at full risk, NMD currently saw an average reimbursement of $10,000
to $12,000, per member/per year, which Skylight expects to maintain
going forward, thereby providing the capital to focus on the
patient needs and improved patient health outcomes. TTM revenues
from primary care including MA contracts were approximately US $35
million on an unaudited basis. While NMD has not yet generated
profitability, with its scale in combination with Skylight and
planned initiatives, it is expected to become profitable this
year.
Total consideration for NMD was US $8 million paid in cash at
closing Skylight financed this transaction with a drawdown of US
$10 million from a US $20 million debt line facility with a New
York based credit lender which will also be used for working
capital to support integration and operation expenses. The
Company will still have US $10 million and working capital
available to fund additional acquisitions. Term of the facility is
3 years, with an annual coupon of SOFR plus 11% paid in cash.
Principal will be amortized on a quarterly basis and subject to
certain cash sweep triggers and a final balloon payment. Cash
payments including interest will begin in July. The Company
may, at its discretion, pay back the lender in part or in full at
any time during the term, without premium or penalty. The Lender
has received total consideration of 4,542,345 million warrants
priced at $1.17. The expiry date will be May 5, 2025, with
respect to that percentage of the warrants that is equal to the
percentage of the amount of principal amount of the debt line
facility outstanding on May 5, 2023 compared to the amount
outstanding on May 5, 2022, and the expiry date will be May 5, 2023
for the remaining warrants. Half (50%) of the warrants will
be held in escrow and released in proportion to the pro rata
percentage of the amount of any future draw downs.
The expected expansion of the risk contracts to existing
Skylight practices in Florida represent a significant organic
growth opportunity. The Company expects to close the transaction in
short order following customary closing procedures, including
required board and exchange approvals. The Company will issue a
release upon closing of the transaction.
About Skylight Health Group
Skylight Health Group (NASDAQ:SLHG;TSXV:SLHG) is a healthcare services and
technology company, working to positively impact patient health
outcomes. The Company operates a US multi-state primary care health
network comprised of physical practices providing a range of
services from primary care, sub-specialty, allied health, and
laboratory/diagnostic testing. The Company is focused on helping
small and independent practices shift from a traditional
fee-for-service (FFS) model to value-based care (VBC) through tools
including proprietary technology, data analytics and
infrastructure. In an FFS model, payors (commercial and government
insurers) reimburse on an encounter-based approach. This puts a
focus on volume of patients per day. In a VBC model, the providers
offer care that is aimed at keeping patients healthy and minimize
unnecessary health expenditures that are not proven to maintain the
patient's well-being. This places an emphasis on quality over
volume. VBC will lead to improved patient outcomes, reduced cost of
delivery and drive stronger financial performance from existing
practices.
Forward Looking Statements
This press release may include predictions, estimates or other
information that might be considered forward-looking within the
meaning of applicable securities laws. While these forward-looking
statements represent our current judgments, they are subject to
risks and uncertainties that could cause actual results to differ
materially. You are cautioned not to place undue reliance on these
forward-looking statements, which reflect our opinions only as of
the date of this release. Please keep in mind that we are not
obligating ourselves to revise or publicly release the results of
any revision to these forward-looking statements in light of new
information or future events. When used herein, words such as "look
forward," "believe," "continue," "building," or variations of such
words and similar expressions are intended to identify
forward-looking statements. Factors that could cause actual results
to differ materially from those contemplated in any forward-looking
statements made by us herein are often discussed in filings we make
with the Canadian and United States securities regulators,
including the Securities and Exchange Commission, available
at: www.sec.gov,
and Canadian Securities Administrators, available at www.sedar.com, and on our website,
at skylighthealthgroup.com.
For more information, please visit our website or contact:
Investor Relations:
Jackie Kelly
investors@skylighthealthgroup.com
416-301-2949
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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