Empower Clinics Inc (OTCMKTS:EPWCF) (CSE:CBDT) (FRA:8EC) unveiled a potential acquisition on Wednesday which will expand its footprint into Canada, with six facilities in the Greater Toronto area and a chance to open a further 30 clinics across the country.
The firm has struck a non-binding deal to buy, via cash and shares, Lawrence Park Health and Wellness Clinic Inc, 1100900 Canada Inc dba Atkinson, and Momentum Health Inc, collectively called Momentum Health.
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The deal is subject to health and wellness group Empower closing a debt or equity financing to raise a minimum of C$750,000 gross. To that end it has struck a deal with Mackie Research for a placing to raise up to C$1.1 million.
"The acquisition of Momentum Health is expected to advance the direction and growth prospects for Empower overall," Steven McAuley, Empower CEO, said in a statement.
"As we continue to position Empower as an integrated healthcare company, bringing alternative care together with primary care facilities enables us to deploy a better healthcare model, based on progressive technology and in-person care."
The transaction sees Empower also agree to employ Momentum Health co-founders, Dr Jordan Rabinowitz and Dr Aviv Tsimerman to lead the proposed Canadian clinic expansion strategy.
US-focused Empower already boasts a database of 165,000 patients through clinics in the southwest US, a telemedicine platform and a medical diagnostics laboratory.
It has also been providing coronavirus (COVID-19) testing services as part of a four-phased nationwide initiative.
This latest deal includes two standalone wellness clinics and four new co-located clinics in the Greater Toronto area and includes incentives for the two Momentum Health co-founders to open a further 30 clinics across Canada. Momentum Health's services include physiotherapy, chiropractic, massage therapy, and athletic therapy.
On closing of any deal, Empower will pay C$275,000 cash at closing and a C$75,000 performance holdback, for a total cash payment of C$350,000.
In addition, Empower will issue Dr Rabinowitz and Dr Tsimerman shares in the firm worth C$250,000 and, subject to certain performance metrics, more shares worth a total of C$250,000, which will vest in quarterly installments over two years.
Mackie will act as sole agent and sole bookrunner for the related financing, which will see units issued at C$0.05 each. Mackie will also have an option to offer for sale a further 15% of the number of units sold at the offer price.
Empower said it intends to use the proceeds of the placing to support clinic acquisitions, lab testing services, sales and marketing, and for general working capital.
Contact the author at giles@proactiveinvestors.com