JP Morgan Joins Syndicate of
Lenders
VANCOUVER, June 26, 2017 /PRNewswire/ - CRH Medical
Corporation (TSX: CRH) (NYSE MKT: CRHM) ("CRH" or the "Company")
announces that it has increased its credit facility (the "New
Credit Facilities") with a syndicate of lenders led by The Bank of
Nova Scotia
("Scotiabank").
The New Credit Facilities increase the amount of available
credit from US$55 million to
US$100 million and now consist of a
US$75 million revolving credit
facility and a US$25 million term
facility. The syndicate, led by Scotiabank, includes US Bank
National Association, Canada
Branch ("U.S. Bank") and has been expanded to include JP Morgan
Chase Bank, N.A. ("JP Morgan") as a new lender.
In addition, the New Credit Facilities provide CRH access
to an uncommitted accordion facility that would increase the amount
of revolving credit facilities available to CRH by US$25 million.
The New Credit Facilities will be used to fund future
acquisitions by CRH and to repay all of the debt owing by CRH to
Crown Capital Fund III Management Inc. ("Crown") provided in
December 2014 (the "Crown
Debt").
The New Credit Facilities also reduce the interest rate
and the standby fees payable by CRH. The New Credit Facilities
mature on June 26, 2020. The new term
facility will be repaid in quarterly installments of 2.5% of the
initial principal amount, with a balloon payment due upon
maturity.
Richard Bear, Chief
Financial Officer, stated, "We are pleased to announce our New
Credit Facilities and the addition of JP Morgan to the lending
syndicate. Our financial strength allows us to expand our access to
low cost, non-dilutive capital to maintain our acquisition pace. We
thank Scotiabank and U.S. Bank for their continued support and
welcome JP Morgan as our newest partner".
Features of the Amended Facilities include:
- Introduction of a US$25
million accordion feature
- Extension in maturity date to June
26, 2020
- Provides flexibility to CRH for additional acquisitions
and a credit framework for future growth
- Lowers the cost of capital to approximately
3.50% per annum
- Allows CRH to repay the Crown Debt (which bears an
interest rate of 12% per annum)
Edward Wright, Chief
Operating Officer, added, "The New Credit Facilities will provide
the funds required to finance acquisitions we expect to close this
year, enable us to repay Crown, reduce our interest expense, and
provide us a funding platform for future growth". Mr. Wright
continued, "Crown has been an excellent and supportive partner -
without their support, our first acquisition back in December of
2014 would not have been possible."
Forward-looking Statements
Information included or incorporated by reference in this
document may contain forward-looking statements. This information
may involve known and unknown risks, uncertainties, and other
factors which may cause our actual results, performance, or
achievements to be materially different from the future results,
performance, or achievements expressed or implied by any
forward-looking statements. Forward-looking statements, which
involve assumptions and describe our future plans, strategies, and
expectations, are generally identifiable by use of the words "may,"
"will," "should," "expect," "anticipate," "estimate," "believe,"
"plan," "intend" or "project" or the negative of these words or
other variations on these words or comparable terminology. Certain
risks underlying our assumptions are highlighted below; if risks
materialize, or if assumptions prove otherwise to be untrue, our
results will differ from those suggested by our forward-looking
statements and our results and operations may be negatively
affected. Forward-looking statements in this document include
statements regarding profitability, additional acquisitions,
increasing revenue and Operating EBITDA, continued growth of our
business in line with historical growth rates, trends in our
industry, financing plans, our anticipated needs for working
capital and leveraging our capabilities. Actual events or results
may differ materially from those discussed in forward-looking
statements. There can be no assurance that the forward-looking
statements currently contained in this report will in fact occur.
The Company bases its forward-looking statements on information
currently available to it and disclaims any intent or obligations
to update or revise publicly any forward-looking statements,
whether as a result of new information, estimates or options,
future events or results or otherwise, unless required to do so by
law.
Forward-looking information reflects management's current
expectations regarding future events and operating performance as
of the date of this document. Such information involves significant
risks and uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not such results will be achieved. A
number of factors could cause actual results to differ materially
from the results discussed in forward-looking information,
including, without limitation: risks related to our need to raise
additional capital to fund future operations; various restrictive
covenants and events of default under our Credit Facilities; the
possibility that we may still be able to incur substantially more
debt, which could further exacerbate the risks associated with
increased leverage despite current indebtedness levels; ASCs or
other customers may terminate or choose not to renew their
agreements; the CMS may review and reduce the reimbursement of
anesthesia procedure codes relevant to GI procedures; a significant
number of our affiliated physicians could leave our affiliated
ASCs; we may be unable to enforce the non-competition and other
restrictive covenants in our agreements; change in the regulations
or regulatory interpretations may obligate us to re-negotiate
agreements of our anesthesiologists or other contractors; we may
not be able to successfully recruit and retain qualified
anesthesiologists or other independent contractors; failure to
manage third-party service providers may adversely affect our
ability to maintain the quality of service that we provide; the
continuing development of our products and provision of our
services depends upon us maintaining strong relationships with
physicians; we may or may not successfully identify and complete
corporate transactions on favorable terms or achieve anticipated
synergies relating to any acquisitions or alliances, and such
acquisitions could result in unforeseen operating difficulties and
expenditures, or require significant management resources and
significant charges; we may be adversely affected if we lose any
member of our senior management that has been key to our growth; we
may not be able to effectively undertake or manage our growth
initiatives; if we are unable to manage growth, we may be unable to
achieve our expansion strategy; the ACA reform in the United States may have an adverse effect
on our business, financial conditions, results of operations and
cash flows and the trading price of our securities; changing
legislative and regulatory requirements and healthcare spending and
pricing pressures may adversely affect our business; the policies
of health insurance carriers may affect the amount of revenue the
Company receives; we operate in an industry that is subject to
extensive federal, state, and local regulation, and changes in law
and regulatory interpretations; our industry is already competitive
and could become more competitive; unfavorable changes or
conditions could occur in the states where our operations are
concentrated; if there is a change in federal or state laws, rules,
regulations, or in interpretations of such federal or state laws,
rules or regulations, we may be required to redeem our physician
partners' ownership interests in anesthesia companies under the
savings clause in our joint venture operating agreements; changes
in the United States federal
Anti-Kickback Statute and Stark Law and/or similar state laws,
rules, and regulations could result in criminal offences and
potential sanctions; government authorities or other parties may
assert that our business practices violate antitrust laws; our
common shares may be subject to significant price and volume
fluctuations; if we were to lose our foreign private issuer status
under United States federal
securities laws, we would likely incur additional expenses
associated with compliance with United
States securities laws applicable to United States domestic issuers; significant
shareholders of the Company could influence our business operations
and sales of our shares by such significant shareholders could
influence our share price; anti-takeover provisions could
discourage a third party from making a takeover offer that could be
beneficial to our shareholders; continuing unfavorable economic
conditions could have an adverse effect on our business; changes in
the medical industry and the economy may affect the Company's
business; income tax audits and changes in our effective income tax
rate could affect our results of operations; our dependence on
suppliers could have a material adverse effect on our business,
financial condition and results of operations; our industry is
subject to health and safety risks; adverse events related to our
product or our services may subject us to risks associated with
product liability, medical malpractice or other legal claims,
insurance, recalls and other liabilities, which may adversely
affect our operations; our industry is the subject of numerous
governmental investigations into marketing and other business
practices, which could result in the commencement of civil and/or
criminal proceedings, substantial fines, penalties, and/or
administrative remedies, divert the attention of our management,
and have an adverse effect on our financial condition and results
of operations; we may be subject to a variety of regulatory
investigations, claims, lawsuits, and other proceedings; if we are
unable to adequately protect or enforce our intellectual property,
our competitive position could be impaired; the Company may not be
successful in marketing its products and services; evolving
regulation of corporate governance and public disclosure may result
in additional expenses and continuing uncertainty; we may be
subject to criminal or civil sanctions if we fail to comply with
privacy regulations regarding the use and disclosure of patient
information; our employees and third-party contractors may not
appropriately record or document services that they provide; we may
write-off intangible assets; we may face exposure to adverse
movements in foreign currency exchange rates; our employees and
business partners may not appropriately secure and protect
confidential information in their possession; we are dependent on
complex information systems; conflicts of interest may arise among
the Company's officers and directors as a result of their
involvement with other companies.
For a complete discussion of the Company's business,
including the assumptions and risks set out above, see the
Company's most recent Annual Information Form which is available on
SEDAR at www.sedar.com.
SOURCE CRH Medical Corporation