Patient Home Monitoring (PHM:TSXV) has grown itself, largely via acquisitions, into the most valuable (by market cap) company on the TSX Venture.
Patient Home Monitoring’s market cap sat at roughly $342 million Monday morning, up 4% and on pace to trade over 1 million shares today.
The company’s latest press release from June 18th was titled Patient Home Monitoring Corp. (PHM) Announces It Has Initiated Process to Graduate to TSX Senior Exchange.
So, how did a healthcare stock that was relatively unknown just 12 months ago take the TSX Venture by storm, rise to the pinnacle in respect to valuation, and casually announce its planned graduation to Canada’s senior exchange?
Acquisitions.
Patient Home Monitoring has been acquiring companies (or signing LOIs) in the United States rather quickly over the past year.
Dalsin sets the pace with Patient Home Monitoring: acquisitions
Patient Home Monitoring reported an annualized run rate revenue of $62,148,000 on April 28th, but…
Michael Dalsin, Patient Home Monitoring’s chairman, commented in that same press release that:
“We had a productive quarter in terms of signing LOIs and when closed, we will exceed $100 million in annualized revenues. We are also working toward finalizing the LOI with a $40 million annual revenue business very soon.”
Click here to read the entire press release.
The very next day, on April 29th, Patient Home Monitoring announced it executed a non-binding Letter of Intent (LOI) to acquire a company headquartered in the southeast United States with management-adjusted unaudited annualized revenues of approximately $40,000,000 and Annualized Adjusted EBITDA of approximately $13,000,000.
In respect to the LOI, Dalsin commented that,
“This is a transformational acquisition for PHM…”
and that,
“With this acquisition, and assuming we close all of the outstanding LOIs, PHM will be about a $140 million run rate revenue company with more than $32 million in run rate Adjusted EBITDA…”
Click here to read the entire press release.
On April 20th, I published an article titled Patient Home Monitoring Market Cap Exceeds $450 million.
On June 9th, a company press release was subtitled: Increases Annualized Run-rate Revenue to over $115,000,000 and Annualized Run-rate Adjusted EBITDA to over $30,000,000.
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In the company’s latest press release from June 18th, Michael Dalsin, Chairman of Patient Home Monitoring, commented that, “After our recent acquisition, PHM has been attracting more and more interest from the US investment community.”
Dalsin was referring to the Louisiana-Based Sleep Management acquisition, of which PHM announced the execution of a final binding purchase agreement to acquire the company on June 9th. Below is a short excerpt from that press release:
“Final Terms of the Agreement
PHM will increase revenues by nearly 60% and increase EBITDA by more than 150%. Total consideration paid is $36 million in cash and 42.75 million shares, representing less than 15% of PHM’s total outstanding common shares. The shares will be released from holds over a three year period. Closing of the acquisition will be subject to approval by the TSX Venture exchange and other standard conditions.”
Click here to read the entire press release.
Noteably, PHM reported that, “The business had annualized revenues of more than $42,500,000 and Adjusted EBITDA of more than $18,000,000.”
This is noteworthy because it represents far more revenue and EBITDA than PHM had not too long ago.
Patient Home Monitoring uses shares to acquire companies
Patient Home Monitoring, much like Amaya and other public companies before it, has used its ability to issue shares to help complete acquisitions. Dalsin and his team have proven they know how to get value add deals done.
In respect to the Louisana-based sleep management acquisition, that will see PHM increase revenues by nearly 60% and increase EBITDA by more than 150%, the issuance of shares were integral. PHM reported that, “Total consideration paid is $36 million in cash and 42.75 million shares, representing less than 15% of PHM’s total outstanding common shares.”
Click here to read the entire press release.
What the recently announced potential up listing to the TSX, and possible US exchange listing, could mean for PHM’s future valuations and exposure is yet to be seen; however, the US is the holy grail for the healthcare-related, specifically biotech, sector. I’ll be watching Patient Home Monitoring closely throughout the second half of 2015.
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