Core Viewpoint - Extendicare Inc. announced the acquisition of Closing the Gap Healthcare Group Inc. by its subsidiary ParaMed Inc. for approximately $75.5 million, enhancing its home health care services in Ontario and Nova Scotia [1][3][4]. Transaction Details - The acquisition is structured on a debt-free, cash-free basis, with an earnout tied to new business revenue generation expected in the first year post-closing [3][8]. - The transaction is subject to customary closing conditions and is anticipated to close in the third quarter of 2025 [2]. Company Background - Closing the Gap has been a leader in home and community healthcare for 35 years, providing a range of services including personal support, nursing, physiotherapy, and social work [5][4]. - In 2024, Closing the Gap delivered over 1.1 million service hours through approximately 1,200 caregivers [5]. Financial Impact - The acquisition is projected to add approximately $84.2 million in revenue to Extendicare's home health care segment for 2024, with similar margins to ParaMed [6]. - The combined service volumes for the home health care segment would reach approximately 12.1 million hours with an average daily volume of 33,164 [7]. - The earnout from the transaction is estimated to be between $3.5 million and $5.5 million, contributing an additional $7.0 to $11.0 million in revenue [8]. Synergies and Growth Potential - The integration of back-office functions is expected to generate approximately $1.1 million in annualized cost synergies in the first year following the closing [8]. - The acquisition is seen as a strategic move to enhance Extendicare's capabilities and market presence in the home health care sector [4].
Extendicare Announces Agreement to Acquire Closing the Gap Healthcare Group