Acquires Shareholding

 

TIDMAHI 
 
RNS Number : 0024M 
Allied Healthcare International Inc 
16 May 2010 
 

Allied Healthcare International Inc. Acquires Shareholding in Homecare 
Independent Living Group 
 
Transaction Provides Allied With Access to New and Growing Northern Ireland and 
Republic of Ireland Markets 
 
NEW YORK, NY--(Marketwire - May 16, 2010) - Allied Healthcare International Inc. 
(NASDAQ: AHCI) (AIM: AHI) ("Allied" or the "Company"), a leading provider of 
flexible healthcare staffing services in the United Kingdom, announced today 
that its UK subsidiary, Allied Healthcare Group Limited, has acquired a 
shareholding in a group of businesses commonly known as Homecare Independent 
Living Group ("Homecare"). 
 
The Homecare business, with over 620 staff members, is a leading provider of 
social care to the elderly, physically disabled and mentally disabled with four 
operating divisions in Northern Ireland and an increasing presence in the 
Republic of Ireland (Eire). The transaction will provide Allied with a 
market-leading position in Northern Ireland as well as a strategic footprint in 
the Republic of Ireland market. Both are new territories for the Company with 
strong growth potential. Allied expects this acquisition to be earnings 
enhancing. Further, the two vendors of Homecare (the "Vendors") will remain in 
their existing roles as directors of the Homecare business to be joined by 
directors appointed by Allied to this business. 
 
Since its formation in 1994, Homecare has built a market-leading domiciliary 
care business, in partnership with all five Health and Social Care Trusts in 
Northern Ireland as well as the Health Service Executive in Eire. It also 
operates three specialist divisions. The Housing and Support Services divisions 
provide fully furnished temporary housing and tailored support to vulnerable 
members of the community in line with the U.K. Government's policy of supporting 
people in their local communities. The recently added Peripatetic Services 
division combines domiciliary care, housing and support for individuals with a 
high complexity of need. These specialist services are not currently provided by 
Allied in its home market and the transaction offers the opportunity for the 
Company to capitalize on Homecare's experience. 
 
Allied has acquired a 50.1% shareholding in L&B (No. 182) Limited, the holding 
company of the five entities that make up the Homecare business, from the 
Vendors for a consideration of GBP3.9 million ($5.8 million). Such consideration 
may be adjusted based on the final value of the net assets. This was funded 
through Allied's cash on hand. In addition, Allied has also entered into call 
option agreements giving Allied the right to buy the remaining shares between 
March 2013 and March 2020. The Vendors have also entered into put option 
agreements giving the Vendors the right to sell the remaining shares between 
March 2011 and March 2020. The maximum amount payable by Allied for 100% of the 
Homecare business will be GBP11.2 million ($16.5 million) during this period and 
is subject to Homecare achieving certain annual earnings before interest, taxes, 
depreciation and amortization ("EBITDA") targets. It is anticipated that the 
purchase of the additional shareholdings in L&B (No.182) Limited will be funded 
through cash on hand. 
 
Sandy Young, Chief Executive Officer of Allied, commented, "Where Great Britain 
has outsourced approximately 80% of home care services to the independent 
sector, Northern Ireland and Eire are at approximately 50% and 5%, respectively. 
We see these markets following the same trends of outsourcing and rapidly aging 
populations as we have seen in Great Britain and, therefore, they are of great 
strategic value to Allied. Furthermore, Homecare is a well-respected and 
established business with an excellent platform for future growth across the 
region. I am delighted to welcome Homecare's employees into the Allied 
Healthcare Group and we look forward to working closely with the existing 
directors to realize our shared vision for growth and quality of care over the 
coming years." 
 
The Directors of Homecare said, "This is an exciting milestone in our business 
growth strategy and believe Allied to be the right team to grow this business 
with. We view this as a major vote of confidence in the Northern Ireland and 
Republic of Ireland economies and expect this to create new local job 
opportunities. It gives Homecare the financial strength to both expand our 
services in Northern Ireland as well as put into action our plans to 
aggressively grow our presence in the underdeveloped and high potential private 
care market in the Republic of Ireland." 
 
The following disclosure is made pursuant to the AIM rules. The unaudited 
statutory accounts of the five entities that make up the Homecare business for 
the year ended March 31, 2009 showed aggregated revenues of GBP9.4 million 
($13.9 million), profit before tax of GBP0.3 million ($0.4 million) and net 
assets of approximately GBP0.2 million ($0.3 million) at March 31, 2009. 
 
ABOUT ALLIED HEALTHCARE INTERNATIONAL INC. 
Allied Healthcare International 
Inc. is a leading provider of flexible healthcare staffing services in the 
United Kingdom. Allied operates a community-based network of over 110 branches 
with the capacity to provide carers (known as home health aides in the U.S.), 
nurses, and specialized medical personnel to locations covering approximately 
90% of the U.K. population. Allied meets the needs of private patients, 
community care, nursing and care homes, and hospitals. For more news and 
information please visit: www.alliedhealthcare.com. For more information on the 
Homecare business please visit: www.homecareindependentliving.com. 
 
FORWARD-LOOKING STATEMENTS 
Certain statements contained in this news release 
may be forward-looking statements. These forward-looking statements are based on 
current expectations and projections about future events. Actual results could 
differ materially from those discussed in, or implied by, these forward-looking 
statements. Factors that could cause actual results to differ from those implied 
by the forward-looking statements include: general economic and market 
conditions; Allied's ability to continue to recruit and retain flexible 
healthcare staff; Allied's ability to enter into contracts with local government 
social services departments, NHS Trusts, hospitals, other healthcare facility 
clients and private clients on terms attractive to Allied; the general level of 
demand for healthcare and social care; dependence on the proper functioning of 
Allied's information systems; the effect of existing or future government 
regulation of the healthcare and social care industry, and Allied's ability to 
comply with these regulations; the impact of medical malpractice and other 
claims asserted against Allied; the effect of regulatory change that may apply 
to Allied and that may increase costs and reduce revenues and profitability; 
Allied's ability to use net operating loss carry forwards to offset net income; 
the effect that fluctuations in foreign currency exchange rates may have on our 
dollar-denominated results of operations; and the impairment of goodwill, of 
which Allied has a substantial amount on the balance sheet, may have the effect 
of decreasing earnings or increasing losses. Other factors that could cause 
actual results to differ from those implied by the forward-looking statements in 
this press release include those described in Allied's most recently filed SEC 
documents, such as its most recent annual report on Form 10-K, all quarterly 
reports on Form 10-Q and any current reports on Form 8-K filed since the date of 
the last Form 10-K. Allied undertakes no obligation to publicly update or revise 
any forward-looking statements, whether as a result of new information, future 
events, or otherwise. 
Allied Healthcare International Inc. 
 
 Sandy Young 
 Chief Executive Officer 
 Paul Weston 
 Chief Financial 
Officer 
 [phone] 
 Or 
 Piper Jaffray Ltd. (Nominated 
Adviser) 
 Matthew Flower 
 Rupert Winckler 
 [phone] 
8700 
 Or 
 ICR, LLC 
 Sherry Bertner 
 Managing Director 
 +1 646 277 
1200 
[e-mail] 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 ACQGGUAPAUPUPUQ