Transformative acquisition strongly reinforces company’s strategic growth plan
Assure Holdings acquires Neuro-Pro Monitoring. (Credit: FreeDigitalPhotos.net/adamr.)
Assure Holdings, a provider of intraoperative neuromonitoring services (IONM), is pleased to announce that it has completed (the “Completed Agreement”) the previously announced acquisition (the “Acquisition”) of all of the assets of Neuro-Pro Monitoring (Neuro-Pro), one of the largest IONM service providers in Texas.
Strengthens and Diversifies Revenue Stream with Substantial Increase in Number of Procedures
Expanded Scale Expected to Facilitate Acceleration of In-Network Contracts with Insurance Companies
Immediately Accretive to Earnings and Cash Flow in 2020
Assure acquired Neuro-Pro, one of the largest IONM companies serving the Dallas Ft. Worth metroplex. Neuro-Pro’s 13 technologists support 25 surgeons across 14 facilities. Neuro-Pro’s total number of procedures was 2,551 in 2019. Exclusive of Neuro-Pro, Assure’s total number of procedures in 2019 was 5,813. Historically, approximately 80% of Neuro-Pro’s procedures were commercial insurance payers while roughly 50% of Assure’s procedures are commercial payers. From a financial perspective, commercial insurance payers are more profitable procedures to Assure than procedures covered for patients with government insurance. When Assure reports fourth quarter and full-year 2019 results, 596 Neuro-Pro procedures and their associated financial impact, will now be included as these cases occurred after the acquisition agreement was announced on November 1, 2019.
John A. Farlinger, Assure’s executive chairman and CEO said, “This acquisition is truly transformative for Assure. It is consistent with our strategic plan to create scale by augmenting our organic growth with accretive M&A opportunities. We believe that Assure’s rapid acceleration in number of procedures performed, generated organically and through the acquisition of Neuro-Pro, strengthens our negotiating position and ability to sign additional in-network insurance agreements, another key initiative for the Company in 2020.”
Farlinger continued, “This Acquisition improves our financial position. In 2019, on an unaudited basis, Neuro-Pro generated approximately $6 million of incremental cash receipts from revenue and roughly $3 million in net income. We expect to unlock additional business opportunities in Texas because of this acquisition and meaningfully improve Neuro-Pro’s historic per procedure revenue in 2020 and beyond. Moreover, Neuro-Pro has built and nurtured important relationships, including with some of the most prestigious spine surgeons in the Dallas Ft. Worth area.”
Farlinger added, “The final terms for this acquisition are highly favorable from a payment schedule and cost of capital perspective. We are pleased that Assure shareholders will benefit from this immediately accretive transaction.”
Farlinger concluded, “I want to officially welcome the Neuro-Pro team to the Assure family. We have already made substantial progress executing our integration plan.”
Jason Papes, Neuro-Pro’s principal said, “We chose to join Assure because we share a commitment to clinical excellence and an exceptional standard of patient care. With the scale, resources and expertise that Assure provides, we expect to bring additional surgeons onto the platform in the Dallas Ft. Worth metroplex and elsewhere.”
Pursuant to the Completed Agreement Assure will pay US$7.7 million to Neuro-Pro. The Purchase Price (the “Purchase Price”) will be paid as follows:
US$530,000, was paid on February 14, 2020;
US$1,200,000 on March 31, 2020;
monthly payments of US$328,462 commencing in April 2020 to April 2021; and
a final cash payment of US$1,700,000 (the “Final Cash Payment”) on May 31, 2021
Source: Company Press Release