October 8, 2009
Centric Health Corporation (TSX: CHH), a diversified healthcare company, today announced that it has entered into an agreement to form a strategic alliance with PrevCan, Inc. (“INTERVENT Canada”). INTERVENT Canada is focused on wellness, prevention, lifestyle and disease-management programs that offer innovative technologies with advanced outcome reporting and mentorship modules focusing on nutrition, physical activity, weight management, stress management, tobacco cessation and diabetes management. The alliance will enhance Centric Health’s partnership with healthcare professionals; expand the presence of INTERxVENT in Canada and internationally; and consequently augment Centric Health’s product and service offering, revenue streams and, ultimately, return on investment.
“With a global focus on spiraling healthcare costs, all countries are now seriously embracing wellness and preventative programs to contain costs and better manage chronic conditions that accompany longevity,” said Dr. David Alter, Chief Scientific Officer, INTERVENT Canada. “Over ninety-five percent of worldwide healthcare costs are spent on treating illness. There is no doubt that there is overwhelming scientific evidence supporting the social, economic and health benefits of prevention over cure.”
“The scientifically validated platform has been developed over more than a decade and is actively being rolled out, customized and applied across a range of corporations in Canada, the USA and internationally,” said Dr. Saul Quint, Chief Executive Officer, INTERVENT Canada. “Healthier employees unequivocally translate into lower healthcare costs, higher productivity and an overall better quality of life.”
Centric Health, through Alegro Health Partners, will make a mandatorily convertible loan of $2 million to INTERVENT Canada during 2010 and 2011 subject to certain terms and milestones. Absent an event of default, conversion will result in Centric Health owning between a minimum of 20% and a maximum of 32% of the fully diluted shares of INTERVENT Canada linked to it achieving an EBITDA of $2 million for the financial year ending December 31, 2011. As a condition of this alliance, key INTERVENT Canada management and existing shareholders will invest a further $500,000 on the same terms and conditions. In addition, current INTERxVENT Canada shareholders will be granted a total of one million Centric Health Warrants exercisable over a five year period subject to certain performance criteria. While the organizations are already working together, the effective date of the transaction will be January 4, 2010, subject to certain conditions precedent and milestones being achieved.
“The market for health and wellness programs is currently estimated at $1.2 billion in Canada alone, and is expected to double in the next three to five years,” said Dr. Jack Shevel, Interim President and Chief Executive Officer, Centric Health. “This transaction complements and benefits Centric Health’s expansion strategy to establish MultiCare Centres and other business units in partnership with healthcare professionals, thereby offering our patients a quality lifestyle.”