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Allied Healthcare International Inc. (AHCI:NSQ), the US quoted provider of temporary staffing services to the health care and social care industries in the UK, has announced 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, provides 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. 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. The two vendors of Homecare will remain in their existing roles as Directors.
Allied has acquired a 50.1% shareholding in L&B Limited, the holding company of the five entities that make up the Homecare business, from the Vendors for a consideration of 3.9 million Pounds ($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 11.2 million Pounds ($16.5 million) during this period and is subject to Homecare achieving certain annual earnings before interest, taxes, depreciation and amortisation ("EBITDA") targets. It is anticipated that the purchase of the additional shareholdings in L&B 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 the Republic of Ireland 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."