EX-99.1 2 d201420dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

AKUMIN PROVIDES UPDATES RELATED TO

ALLIANCE HEALTHCARE SERVICES ACQUISITION

Plantation, FL — July 26, 2021 — Akumin Inc. (NASDAQ/TSX: AKU) (“Akumin”) is pleased to provide an update with respect to its previously announced proposed acquisition of Alliance HealthCare Services, Inc. (“Alliance”) and to announce the filing today in Akumin’s public disclosure at www.sedar.com and www.sec.gov of (i) consolidated financial statements of Alliance for the years ended December 31, 2020 and 2019, (ii) condensed consolidated financial statements of Alliance as of March 31, 2021, (iii) unaudited pro forma combined financial information as at March 31, 2021 (after giving effect to the acquisition and related financing arrangements), and (iv) management discussion and analysis relating to items (i) and (ii) above.

The acquisition continues to be expected to close in the third quarter of 2021 subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions, including final approval of the Toronto Stock Exchange.

Management Composition Post-Closing of Acquisition

Upon closing of the acquisition, Riadh Zine, Akumin’s existing President and Chief Executive Officer, will be named Chairman and Co-Chief Executive Officer of Akumin and Rhonda Longmore-Grund, Alliance’s existing President and Chief Executive Officer, will be named President and Co-Chief Executive Officer of Akumin. In addition, William Larkin, Alliance’s existing Chief Financial Officer, will be named Chief Financial Officer of Akumin and Mohammad Saleem, Akumin’s existing Chief Financial Officer, will be named Senior Vice President of Financial Reporting. Other senior officer positions will be announced as determined in connection with the acquisition.

Director Appointments Post-Closing of Acquisition

Further, as previously announced, on closing of the acquisition, the Akumin board of directors will exercise its right in accordance with applicable corporate laws to increase the size of the board and appoint a nominee of Thaihot Investment Co., LTD (the “Seller”), the seller of Alliance, to fill the vacancy at closing.

In addition, as previously announced, Akumin will hold a special meeting of shareholders within 90 days after closing the acquisition for the appointment of three additional nominees to its board of directors. Subject to clearance of customary exchange conditions, those nominees will consist of (i) James Wyper, (ii) Rhonda Longmore-Grund and (iii) Paul Viviano.

Mr. Wyper will serve as a nominee of Stonepeak, a leading alternative investment firm providing debt and equity financing to Akumin in connection with the acquisition of Alliance. Mr. Wyper is a Senior Managing Director with Stonepeak Infrastructure Partners where he is responsible for leading investments across the healthcare, transportation and logistics sectors. Ms. Longmore-Grund joined Alliance in 2016 as Executive Vice President and Chief Financial Officer before being named Chief Executive Officer in 2018. Mr. Viviano has been President and Chief Executive Officer of Children’s Hospital Los Angeles since 2015 and has served as an independent director on Alliance’s board of directors. Akumin has obtained voting support agreements in respect of the election of the three additional nominees from certain shareholders and persons who will become shareholders after giving effect to the issuance of shares to be issued in connection with the acquisition and related financing arrangements.

Each of the existing directors of Akumin are expected to continue to serve on the board, with Riadh Zine becoming Chairman, Stan Dunford becoming Chairman Emeritus and Murray Lee remaining the lead independent director upon closing of the acquisition.

Financial Information

We previously announced, based on the last twelve months ended March 31, 2021, the combined company is expected to have pro forma revenue(1) in excess of $730 million and pro forma adjusted EBITDA(1) in excess of $210 million. Based on the financial information filed in our public disclosure today and Akumin’s previously filed financial information, for the last twelve months ended March 31, 2021, such pro forma revenue would be $730 million and pro forma adjusted EBITDA would be approximately $213 million. Akumin’s revenue was $247 million with adjusted EBITDA(2) of $52 million, and Alliance’s revenue was $483 million with adjusted EBITDA of $117 million. On a combined basis, adjusted EBITDA is comprised of each of Akumin’s and Alliance’s adjusted EBITDA, expected cost synergies of $24 million, EBITDA(1) of $8 million from Akumin’s previously announced acquisition in Florida which closed May 1, 2021, and other management adjustments of approximately $12 million, including adjustments for Alliance’s discontinued operations and Alliance’s 2020 management incentive compensation. See “Non-GAAP Measures” below.

 

(1) 

Non-GAAP financial measure. See “Non-GAAP Measures” below, including a quantitative reconciliation to the most directly comparable financial measure.

(2) 

Non-GAAP financial measure. See “Non-GAAP Measures” below. Additional information about this measure, including a quantitative reconciliation to the most directly comparable financial measure, can be found under the heading titled “How We Assess the Performance of Our Business – Non-GAAP Measures” in Akumin’s Q1 2021 MD&A.

About Akumin Inc.

Akumin Inc. is a leading provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States with a network of 137 owned and/or operated imaging centers located in Florida, Texas, Pennsylvania, Delaware, Illinois, Kansas, Georgia, and Massachusetts. By combining our clinical expertise with the latest advances in technology and information systems, our centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders and may reduce unnecessary invasive procedures, minimizing the cost and amount of care for patients. Our imaging procedures include MRI, CT, positron emission tomography (PET), ultrasound, diagnostic radiology (X-ray), mammography, and other interventional procedures, performed with the help of over 1,500 team members. For more information, visit www.akumin.com.

About Alliance HealthCare Services, Inc.

Alliance HealthCare Services is a leading national provider of outsourced advanced radiology and radiation therapy services across 45 states in the U.S. Alliance partners with more than 1,000 hospitals, health systems and physician practices to provide a full continuum of solutions, including onsite outpatient services and comprehensive service line management. Alliance’s ~2,100 Team Members deliver exceptional customer and patient care via more than 500 diagnostic radiology and radiation therapy systems. For more information, visit www.alliancehealthcareservices-us.com.

Forward-Looking Information

Certain information in this press release constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events.

 

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Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Akumin as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including, but not limited to, the factors described in greater detail in the “Risk Factors” section of Akumin’s Annual Information Form dated March 31, 2021, which is available at www.sedar.com and www.sec.gov. These factors are not intended to represent a complete list of the factors that could affect Akumin; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and Akumin expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Measures

This press release refers to certain non-GAAP measures. These non-GAAP measures are not recognized measures under United States generally accepted accounting principles (“GAAP”) and do not have a standardized meaning prescribed by GAAP. There is unlikely to be comparable or similar measures presented by other companies. Rather, these non-GAAP measures are provided as additional information to complement those GAAP measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these non-GAAP measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under GAAP. These non-GAAP measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on GAAP measures. We believe the use of these non-GAAP measures, along with GAAP financial measures, enhances the reader’s understanding of our operating results and is useful to us and to investors in comparing performance with competitors, estimating enterprise value, and making investment decisions. We also believe that securities analysts, investors, and other interested parties frequently use non-GAAP measures in the evaluation of issuers. Our management uses non-GAAP measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation.

Non-GAAP financial measures presented in this press release are as follows:

“EBITDA” means net income (loss) attributable to shareholders of Akumin before interest expense (net), income tax expense (benefit) and depreciation and amortization.

“Adjusted EBITDA” means EBITDA, as further adjusted for stock-based compensation, impairment of property and equipment, provisions for certain credit losses, settlement costs, provisions, acquisition-related and public offering costs, gains (losses) in the period, deferred rent expense (credit) and one-time adjustments.

The following table reconciles pro forma revenue and pro forma adjusted EBITDA to the most directly comparable GAAP financial performance measure:

 

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Akumin:

 

     Year ended Dec. 31,     Three months
ended Mar. 31,		     Twelve Month
period ended
March 31,		  
     2020     2019     2021     2020     2021  

Revenue

      251,283       247,436       66,889       71,262       246,910  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to shareholders of Akumin

      (20,398 )      9,428       681       2,235       (21,952 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income tax provision (benefit)

      (5,750 )      3,736       281       445       (5,914 ) 

Depreciation and amortization

      20,460       15,587       5,576       4,987       21,049  

Interest expense

      32,781       20,783       8,368       7,462       33,687  

EBITDA

      27,093       49,534       14,906       15,129       26,870  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjustments:

           

Stock-based compensation

      2,084       3,555       427       593       1,918  

Settlement costs (recoveries)

      2,324       (1,881 )      (24 )      356       1,944  

Acquisition-related costs

      1,079       3,403       1,279       219       2,139  

Operational financial instrument revaluation and other (gains) losses

      (3,908 )      1,017       90       (6,267 )      2,449  

Other financial instruments revaluation and other (gains) losses

      22,079       1,806       (3,365 )      4,263       14,451  

Deferred rent expense (credit)(1)

      2,953       2,380       445       675       2,723  

Adjusted EBITDA

      53,704       59,814       13,758       14,968       52,494  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Alliance:

 

     Year ended
December		     Three-month period
ended March 31		     Twelve Month
period ended
March 31,		  
     2020     2019     2021     2020     2021  

Revenue

      496,208       569,388       119,513       132,405       483,316  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net loss attributable to Alliance HealthCare Services, Inc.

      (63,409 )      (43,135 )      (9,907 )      (11,566 )      (61,750 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income tax expense (benefit)

      264       (6,090 )      —       38       226  

Net income attributable to non-controlling interest

      12,132       18,657       3,895       4,727       11,300  

Interest expense, net

      56,481       56,187       15,963       13,199       59,245  

Depreciation expense

      54,870       59,113       12,721       13,860       53,731  

Amortization expense

      12,240       12,650       2,490       3,134       11,596  

Transaction Costs

      1,358       12,944       704       514       1,548  

Restructuring charges

      1,124       6,216       609       136       1,597  

Impairment charges

      29,580       5,365       —         —         29,580  

Severance and related costs

      1,870       2,917       129       537       1,462  

Loss on extinguishment or modification of debt

      14,614       —         —         —         14,614  

Legal matters and other expenses (included in “Selling, general and administrative expenses”)

      6,465       3,320       2,233       1,447       7,251  

Share-based compensation (included in “Selling, general and administrative expenses”)

      475       507       110       112       473  

Other charges (benefits), net (included in “Other income, net”)

      (2,275 )      463       97       45       (2,223 ) 

Adjusted EBITDA

      125,789       129,114       29,044       26,183       128,650  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Less: net income attributable to non-controlling interest

      (12,132 )      (18,657 )      (3,895 )      (4,727 )      (11,300 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA, net of non-controlling interest

      113,657       110,457       25,149       21,456       117,350  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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     Pro forma
Twelve Month
period ended
March 31,		  
     2021  

Akumin revenue (per above)

      246,910  
  

 

 

  

Alliance revenue (per above)

      483,316  
  

 

 

  

Pro forma revenue

      730,226  
  

 

 

  

Akumin Adjusted EBITDA (per above)

      52,494  
  

 

 

  

Alliance Adjusted EBITDA, net of non-controlling interest (per above)

      117,350  
  

 

 

  

Sub-total

      169,844  

Synergies

      23,603  

EBITDA from acquisition of six imaging clinics in Florida (2)

      7,573  

Other management adjustments

      12,262  

Pro forma Adjusted EBITDA

      213,282  
  

 

 

  

 

(1)

Based on note 7 of the Company’s Q1 2021 Financial Statements; Deferred rent expense (credit) is defined as operating lease cost less operating cash flows from operating leases.

(2)

See Akumin’s press release issued May 3, 2021.

Key Contacts

For Akumin:

R. Jeffrey White

Investor Relations

1-866-640-5222

jeffrey.white@akumin.com

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