MBF Healthcare Acquisition Corp. Announces Signing of Stock Purchase Agreement With Critical Homecare Solutions Holdings, Inc.
The home infusion industry is estimated to be approximately a $5 billionmarket, growing at approximately seven percent per year due to constructivecost setting for payers, a favorable reimbursement environment, and positivedemographic trends. The market is largely fragmented with the top four homecare infusion companies, which includes CHS, representing 25 percent of themarket, with the remaining 75 percent represented by smaller local andregional companies. This combination of macro drivers and marketfragmentation presents a favorable dynamic for growth through acquisitions aswell as organically. CHS is also well positioned to take advantage of the 400new specialty infused drugs currently in the pipeline from pharmaceuticalmanufacturers.
For the three month period ended December 31, 2007, CHS generated anannual run rate of adjusted revenues and adjusted earnings before interest,taxes, depreciation and amortization ("EBITDA") of approximately $218 millionand $43 million, respectively. CHS maintains a healthy pipeline of acquisitiontargets and expects to continue its acquisition strategy of acquiring four tosix companies per year.
Pursuant to the terms of the agreement, MBH will acquire all of theoutstanding capital stock of CHS, a Kohlberg & Co., LLC portfolio company, for$420 million, subject to customary adjustments as set forth in the stockpurchase agreement. Upon completion of the acquisition, MBH will change itsname to Critical Homecare Solutions, Inc., and expects its common stock tocontinue trading publicly on the American Stock Exchange.
MBH intends to fund the purchase price and the acquisition costs andprovide additional capital to CHS for growth and expansion through acombination of approximately $180 million of cash in its trust account,approximately $180 million of debt provided by Jefferies Finance LLC, a $35million equity issuance of MBH common stock to Kohlberg & Co., LLC, otherstockholders of CHS and certain senior members of CHS management, and acommitment from MBF Healthcare Partners, L.P. to acquire up to an additional$50 million in shares of MBH common stock. The shares of MBH common stock tobe issued to Kohlberg & Co., LLC, other stockholders of CHS and certain seniormembers of CHS management and the shares that are subject to the commitmentfrom MBF Healthcare Partners, L.P. will be priced at the closing per shareprice of MBH common stock on February 6, 2008, which was $7.65.
The closing of the acquisition and the issuance of equity to MBFHealthcare Partners, L.P. pursuant to its commitment are subject to MBHstockholder approval and other customary closing conditions. In addition, theclosing of the acquisition is conditioned on holders of less than 30% of theshares of MBH common stock issued in its initial public offering votingagainst the acquisition and electing to convert their MBH common stock intocash, as permitted by the company's Amended and Restated Certificate ofIncorporation. Assuming the transactions receive requisite stockholderapproval and all other conditions are met, MBH anticipates completing theacquisition of CHS in the second or third quarter of 2008.
The combined company will be led by CHS's President and Chief ExecutiveOfficer Robert Cucuel, a seasoned homecare executive. Mr. Cucuel waspreviously President and CEO of Air Products Healthcare and a founder,President
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