Jack Nathan Medical Corp (TSX-V:JNH, OTCQB:JNHMF), a provider of primary care medical clinics located in Walmart Supercentres under the Jack Nathan Health (JNH) brand in Canada and Mexico, has announced the acquisition of five medical clinics in British Columbia.
The healthcare company said as a result of the acquisition, it will have 15 corporate-owned and operating medical clinics, seven of which are based in British Colombia, as part of 76 clinics JNH has across Canada.
“This acquisition represents a major milestone for our company given that it strengthens our presence in British Columbia,” CEO and chief medical officer Dr Glenn Copeland said in a statement.
“The acquired clinics offer synergistic opportunities and will significantly increase our annual revenue run-rate, resulting in improved bottom-line performance,” he added.
READ: Jack Nathan Health sees 2Q revenue jump 70% as it adds new clinics in Canada and Mexico
The company said the five medical clinics acquired are fully operational and have a wide network of medical professionals serving a population estimated at over 4.8 million and growing. It said it will be able to capitalize on new growth opportunities by offering additional medical and ancillary services at these clinics.
Annualized revenue from the newly-acquired clinics is estimated to be over $5 million and all five locations are profitable and should significantly improve JNH’s top- and bottom-line results, it added.
JNH also noted that the transaction is its largest accretive acquisition to date and is part of its growth strategy to convert its licensed clinics into corporate-owned medical centers, which will substantially increase its revenue potential, in addition to its ongoing expansion across Canada and Mexico.
“We are adding a team of highly skilled and experienced doctors and support staff, who have been retained in this transaction to continue providing services to a growing patient network in need of the best medical care,” continued Copeland.
“Our goal is to make Jack Nathan Health (TSX-V:JNH, OTCQB:JNHMF) synonymous with the highest quality medical care throughout the countries we serve, and we remain focused on enhancing the patient experience as well as providing medical coverage, related health, wellness and specialty services in one, convenient multi-disciplinary healthcare destination.”
Referring to an announcement made in May 2021, JNH said it intends to open a new, large-format medical clinic in Victoria, British Columbia, which is approximately 4,000 square feet. Once operational, it said it intends to integrate services from its acquired clinics, providing established medical practices and a network of patients to service with the Walmart Hillside location, which is expected to open in Spring 2022.
The company said the consideration for the acquisition is comprised of an initial cash payment of $525,000 and the issuance of 1,250,000 JNH common shares.
Additionally, there are total cash earnout payments of $975,000 and up to 2,950,000 JNH common shares, which are to be earned out over four separate six-month intervals spanning two years post-closing and tied to performance measures.
In a corporate update, the company said it issued a total of 502,506 deferred share units under its equity incentive plan to its three independent directors for their services for the nine months ending October 31, 2021.
The company also issued 550,000 share purchase options to management, employees, and consultants, which included 450,000 share purchase options, issued to two officers of the company. These share purchase options have an exercise price of $0.205, vesting over 24 months, and expiring in 7 years.
Jack Nathan Medical Corp., operating as Jack Nathan Health (TSX-V:JNH, OTCQB:JNHMF), is one of Canada’s largest health care networks. It is an innovative health care company that is improving access for millions of patients by co-locating physician and ancillary medical services conveniently located inside Walmart stores.
Jack Nathan Health (TSX-V:JNH, OTCQB:JNHMF) was established in 2006 and continues to expand its geographic footprint, delivering exceptional state-of-the-art, turn-key medical centres in 76 Walmart locations across Canada including British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and Quebec, as well as 77 corporate-owned and operated locations in Mexico, in addition to servicing certain Walmart Distribution Centres in Mexico.
Contact the author at stephen.gunnion@proactiveinvestors.com