Business
Ethema to Focus on Acquisitions for Growth Strategy
Ethema to Focus on Acquisitions for Growth Strategy.
About this update from Ethema Health Corporation
[{"type":"text","content":"\n Ethema signs a non-binding letter of intent to acquire a majority interest in an addiction treatment company with $3.6 million of EBITDA West Palm Beach, FL, Dec. 24, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Ethema Health Corporation (OTCQB: GRST) (“Ethema” “GRST” or the “Company”), a provider of healthcare services, has announced that it has signed a non-binding Letter of Intent to acquire a majority interest in an addiction treatment company.  The acquisition target will have approximately $20 million in revenue for 2019 and an EBITDA of $3.6 Million.  Under the terms of the LOI the Company would be required to enter into a binding agreement by February 29, 2020 and be closed by April 30, 2020.  The purchase price will be determined during the due diligence process and is subject to agreement by both parties.   “This is a company and owner that we are familiar with and first attempted to acquire in 2014.  They are well run and have the infrastructure in place that can support growth.  We are very excited that we now have an opportunity to jump start our growth with this platform,” said Shawn Leon, CEO of the Company. Market conditions in Florida have made it very difficult to operate profitably due to very costly marketing to attract clients and very aggressive behavior from insurance companies towards Florida based providers.   The Company has not generated the client levels necessary to fill the current location and must make changes to reduce its operating costs.  With the acquisition, the Company will have an opportunity to produce tremendous cost savings.  The acquisition target operates facilities in Washington State and Arizona and has a head office located in Florida near the Company’s operations in West Palm Beach.  The Company expects to relocate its principle office into the same space as the acquisition target head office and will likely relocate its operation in West Palm Beach into a smaller facility nearby.  The Company is negotiating with another provider to lease a smaller site in West Palm Beach.   Ethema will continue to raise additional capital as it seeks to acquire other already established providers using a set of criteria that is relevant for today’s market c...