Press release from CNW Group
QHR Enters into Agreement to Sell Enterprise Management Solutions Division to Logibec
Monday, December 09, 2013
QHR Enters into Agreement to Sell Enterprise Management Solutions Division to Logibec08:00 EST Monday, December 09, 2013
KELOWNA, BC, Dec. 9, 2013 /CNW/ - QHR Corporation(TSX-V: QHR)("QHR" or the "Company") today announced that it has executed a definitive and binding agreement for the sale of substantially all assets and operations of its Enterprise Management Solutions ("EMS") division to Logibec Groupe Informatique Ltée ("Logibec") for the amount of $20 million in cash less working capital adjustments and customary expenses (the "Transaction").
Logibec is one of Canada's largest healthcare technology companies specialized in the development, marketing, implementation and support of clinical and administrative information systems Logibec is a portfolio company of OMERS Private Equity ("OPE"), the manager of the private equity assets of OMERS, one of Canada's largest pension funds. The Transaction is expected to close in December 2013, subject to satisfactory completion of closing conditions.
Under the Transaction, Logibec will acquire the assets and operations of the EMS division, including customer relationships, all Quadrant-branded products, related intellectual property, fixed assets and will assume certain liabilities. All employees in the EMS division will be offered employment with Logibec. Logibec will also take over office facility leases in Kelowna, BC and Winnipeg, MB that are related to the EMS Division.
Al Hildebrandt, President and CEO of QHR, said "Today's announcement is the result of a comprehensive process undertaken by QHR, our Board of Directors and our external advisors to carefully consider alternatives for our EMS division and how the Transaction will impact our shareholders, our customers and our employees. We have made a strategic decision to continue our aggressive focus and growth plans in the Electronic Medical Records (EMR) and Revenue Cycle Management (RCM) markets. In addition, QHR will realize a solid return for the investment we made in the EMS business. This transaction will provide significant financial resources and capacity to accelerate our market growth in the Canadian and US healthcare markets with our EMR and RCM solutions where we believe SaaS model market opportunities can be expanded."
Mr. Hildebrandt added, "Quadrant has been a leader in the healthcare and social services workforce management software market for many years and has earned a strong reputation for solid execution, high-quality products and high-quality support. This acquisition by Logibec, the market leader in Quebec, offers the Quadrant product line an excellent home with strong product line synergy and a focus for growth in the workforce management market. Under the ownership of Logibec, our current Quadrant customers can expect continued high-quality service levels and performance. The Quadrant client base should experience a seamless transition with continuous staffing and will become part of Canada's largest pure-play healthcare service provider."
"The acquisition of Quadrant accelerates Logibec's effort to offer powerful and scalable solutions in the health and social services market across Canada," said Marc P. Brunet, Logibec President and CEO. "Building on our established reputation in the area of workforce and financial management solutions for complex care settings, this transaction allows us to consolidate the natural synergies between two sets of market leading offerings and deliver cost-effective solutions to a broader array of healthcare institutions and agencies."
Upon completion of the Transaction, QHR will retain all of its corporate resources, the EMR division and the RCM division in their entirety. Going forward, QHR will remain focused on providing innovative solutions to support healthcare customers across a broad range of high-growth markets within Canada and the United States.
QHR intends to use the net proceeds from the Transaction to continue its acquisition strategy in the EMR and RCM markets and to invest in continued technology research and development for SaaS applications. These strategies have the objective of accelerating revenue and earnings growth, both organically and via acquisition, and strengthening and expanding QHR's leadership position in existing and new markets.
Art Mesher, Chairman of QHR's Corporate Development Committee, said "During the course of this past year our objectives have been to strengthen our management team, focus on stabilizing cash flow, and strengthen our balance sheet. I would like to congratulate Al on today's announcement, I believe Logibec is the best steward for our EMS customers and this is the culmination of completing our objectives for this past year and now we are able to focus on growth in our recurring revenue business model going forward."
"The Transaction will result in QHR having a sharpened focus on driving profitable growth," said Jerry Diener, Chief Financial Officer of QHR. "We will continue to focus on refining our cost structure to support scalable growth with improved margins and on our recurring revenue growth model. Approximately $19 million of our current run rate of $25 million of recurring revenue is derived from our remaining EMR and RCM Divisions. We are fully invested for growth, and as we continue to build our business, we expect to see greater operating leverage going forward."
Paradigm Capital Inc. and Aeson Leeds Inc. are acting as financial advisors, and Clark Wilson LLP is acting as legal counsel to QHR.
Conference Call to Discuss the Transaction
The Company executives will host a conference call at 2:00 PM EST (11:00 AM PST) Monday, December 9, 2013, to discuss the Transaction. To join the conference call, please dial Toll Free 1-888-390-0605, Conference ID #: 09199428
For more about QHR, visit: www.QHRtechnologies.com
About QHR Corporation
QHR is a leader in quality and technology, providing software and services in the following markets:
In the Electronic Medical Records ("EMR") market, QHR offers a suite of medical software modules that provide computer-based medical records for family physicians, medical specialists, and surgeons, as well as administrative modules for billing and patient scheduling, that is a key component in the move throughout Canada to provide electronic healthcare records for all Canadians. QHR also provides on-site and off-site (ASP) hosting capabilities for the EMR market.
In the Enterprise Management Solutions ("EMS") market, QHR specializes in workforce management software, which consists of integrated payroll, staff scheduling and human resource software, and customized financial management software built on the Microsoft Dynamics GP platform. These products are targeted at complex healthcare, social services and public safety environments.
In the Revenue Cycle Management ("RCM") market, QHR provides best in class clearinghouse services, with over 1500 payers, which assist US healthcare providers to exchange claim information that ensures accurate revenue management. QHR provides a progressive medical billing service that outsources coding, payer reconciliation and revenue reporting. QHR also supports employer health plan enrolment, employee health plan eligibility and health care interoperability through a 5010 standard based EDI gateway. The RCM markets that QHR services are primarily in the US.
About Logibec Groupe Informatique Ltée
Logibec, a platform company of OMERS Private Equity Inc., is a leading Canadian healthcare IT Company, which offers clients unparalleled solutions and industry expertise to optimize processes in all domains of the healthcare industry. Logibec has been recognized and ranked in the Branham 300 Industry survey for the last 4 years as No. 1 Pure-Play Healthcare ICT Companies in Canada. In the U.S., Logibec's wholly owned subsidiary, MDI Achieve, Inc., is a leader in the long-term-care market with MatrixCare, the fastest growing, cloud-based EHR solution for the eldercare market. With 30 years dedicated to the ever-evolving North American Healthcare market, Logibec's software and information systems are aligned with current and future needs of the health and social services sector. For further information visit: www.logibec.com
About OMERS Private Equity Inc.
OPE is the private equity investment arm of the OMERS Worldwide group of companies. OPE manages the private equity activities of the OMERS pension plan and has over CAD$6 billion of investments under management. The group's investment strategy includes the active ownership of businesses in North America and Europe. OPE is headquartered in Toronto, Canada, with offices in London and New York. For further information visit: www.omerspe.com.
OMERS is one of Canada's largest pension funds with over CAD$60 billion in net assets. It provides first-class pension administration and innovative products and services to almost 430,000 members. Approximately one in every 20 employees working in the province of Ontario is an OMERS member. Through the OMERS Worldwide brand, our team of investment professionals uses a direct drive, active management investment strategy to invest in public and private market assets, including publicly-traded equities, fixed-income, infrastructure, private equity and real estate. For more information, please visit www.omers.com, or www.omersworldwide.com.
Legal Notice Regarding Forward Looking Statements
This news release contains "forward looking statements" within the meaning of applicable Canadian securities legislation. These statements are subject to risks that may cause the actual results to be materially different in future periods from those expressed or implied by such forward looking statement. Forward looking statements in this news release include our expectation to sell the EMS division for $20,000,000; that customers of EMS will have a seamless transition; that we will make acquisitions in the EMR and RCM markets and invest in continued technology research and development for SaaS applications; that we can expand revenue and earnings growth; that we can achieve scalable growth and improved margins; and that we can become a leader in new markets in our fields. Risks that may prevent or delay the forward looking statements from coming to fruition include that we may not complete our sale of the EMS division as a result of conditions not being fulfilled or other reasons; we may not offer products or services that are acceptable to industry regulators or customers; competitors may offer better or cheaper products; our products may not remain competitive in marketing our products; changing regulatory requirements may prevent our products from being sold as expected; we may not be able to attract or retain key personnel; our technology may become obsolete; orders could be cancelled or delayed and market factors may increase our costs more than expected. QHR is a technology business development enterprise where investment and product enhancements must be carefully managed to achieve long-term revenue growth and profitability. It is our policy not to update forward looking statements except to the extent required under applicable securities laws. Further information on the Company is available at www.sedar.com or at the Company's website, www.QHRtechnologies.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE QHR Corporation
For further information:
Al Hildebrandt, President & CEO
Jerry Diener, VP Finance & CFO
Jim Wilson, VP Marketing & Communications