Trading Alert : CONVALO HEALTH INTERNATIONAL CORP(CXV:TSXV, CA)

Convalo Executes Final Binding Purchase Agreements for Hollywood Detox and ARTS; Increases Run Rate Revenues to Over $23 Million and Adjusted EBITDA to Over $5.5 Million

LOS ANGELES, CALIFORNIA–(Marketwired – June 10, 2015) –

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN

Convalo Health International, Corp. (Convalo) (TSX VENTURE:CXV), an acquisition-oriented company focused on rolling up the US addiction rehabilitation market, announced that it executed today a final binding Purchase Agreements for the acquisition of Hollywood Detox Center (Hollywood Detox) and Accredited Rehab and Treatment Services (ARTS), two profitable southern California companies.

Hollywood Detox and ARTS are behavioral health facilities offering detox and residential treatment services for both men and woman in and around the Hollywood and central Los Angeles area.

When added to the outpatient treatment services currently offered by BLVD Treatment Centers, Convalo now has a full service behavioral health platform spanning Hollywood and Central Los Angeles capable of treating patients at every level of the addiction treatment continuum. The combined annual revenue run-rate for this Hollywood and Central Los Angeles business now exceeds $23,000,000 and annualized run rate Adjusted EBITDA now exceeds $5,500,000.

By the end of the year, Convalo will expand this platform to include additional detox and residential treatment centers for both men and women on the west side of Los Angeles.

Three of the companies’ top level executives, Keith Fowler, Brent Ortner and Ryan Newport, will remain on after the transaction and are expected to play key roles in Convalo moving forward.

Terms of the Acquisition

Management has reported combined trailing 12-month revenues in excess of $14 million and Adjusted EBITDA in excess of $3.6 million. This acquisition is expected to increase Convalo’s revenues by over 150% and Adjusted EBITDA by more than 220%.

According to the Purchase Agreements, Convalo will acquire the businesses for a mix of cash and stock. Convalo will pay a total of $7,937,500 in cash and up to 8,000,000 shares or under 3% of the fully diluted shares of the company. Post-acquisition, Convalo will have over $21,500,000 in cash on the balance sheet with which to make further acquisitions. Convalo has no debt.

“We are now a fully established addiction services company in the heart of Los Angeles with over $23 million in revenues and significant profitability” said Mr. Dalsin, Chairman and CEO of Convalo. “While there is a significant positive impact on revenue and profits, this acquisition really only covers Hollywood and Central Los Angeles.  acquisition of the management team gives us the ability to create a similar business in terms of revenues and

CONVALO HEALTH INTERNATIONAL CORP(CXV:TSXV, CA)

0.60CADIncrease0.02(3.45%)Volume: 
Below Average

QUOTE DETAILS

Open 0.6000 P/E Ratio (TTM)
Last Bid/Size 0.6000 / 231 EPS (TTM) -0.02
Last Ask/Size 0.6100 / 211 Next Earnings
Previous Close 0.5800 Beta
Volume 975,314 Last Dividend
Average Volume 1,198,365 Dividend Yield
Day High 0.6100 Ex-Dividend Date
Day Low 0.5700 Shares Outstanding 159.1M
52 Week High 0.8200 # of Floating Shares 154.8618M
52 Week Low 0.2300 Short Interest as % of Float
DRIP Eligible No
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