Agility Health Receives Conditional Approval from TSX Venture Exchange ("TSXV") for Proposed Transaction with Alliance

GRAND RAPIDS, Mich., Feb. 23, 2018 (GLOBE NEWSWIRE) — Agility Health, Inc. (TSXV:AHI) (“Agility Health” or the “Company”) announced today that it has received conditional approval from the TSXV for its previously announced transaction with Alliance Physical Therapy Management, LLC (“Alliance”), a wholly-owned subsidiary of Alliance Physical Therapy Partners, LLC, which is a portfolio company of GPB Capital Holdings, LLC (“GPB”) whereby Alliance has agreed to purchase 100% of the Company’s U.S. based assets (the “Transaction”) pursuant to the terms of a definitive agreement (the “Purchase Agreement”) which was signed on February 2, 2018.  The Transaction, which values the U.S. operations at USD$45 million (the “Purchase Price”), is expected to close on or about  February 28, 2018, subject to receipt of the requisite shareholder approval and final approval from the TSXV . The Company will seek shareholder approval by way of written consent in lieu of holding a meeting of Shareholders in order to avoid the costs to the Company of holding a shareholders’ meeting and to expedite the closing of the Transaction (“Closing”).

In addition to the information provided in Agility’s press release dated February 5, 2018, shareholders should be aware that certain members of Agility’s Board of Directors and management team have interests that may create actual or potential conflicts of interest in connection with the Transaction. These include:

  • Mr. Kenneth Scholten, a director and the President of the Company, owns approximately $598,507 (principal and interest) of the Company’s outstanding convertible debentures which will be repaid by the Company at the closing of the Transaction in accordance with their terms;
  • an insider of the Company owns approximately $598,507 (principal and interest) of the Company’s outstanding convertible debentures which will be repaid by the Company at the closing of the Transaction in accordance with their terms; and
  • Mr. Pierre G. Gagnon, a director and the interim Chief Executive Officer of the Company and Cross Tang Holdings Inc. (“Cross Tang”), a company affiliated with Mr. Gagnon, have provided guarantees (the “Guarantees”) for up to $4,000,000 of a previously disclosed loan made available to the Company by RC Morris (the “RC Morris Indebtedness”). In addition, Mr. Kenneth Scholten has pledged 11,000,000 restricted voting shares of the Company (the “Pledge”) to Mr. Gagnon and Cross Tang as support for the Guarantees. Upon the repayment of the RC Morris Indebtedness at the closing of the Transaction, Mr. Gagnon and Cross Tang will be released from any obligations under the Guarantees and Mr. Scholten will be released from any obligations under the Pledge. In addition, Mr. Gagnon will receive from the Company a guarantee fee of $66,000 (2% of the principal amount of the RC Morris Indebtedness) upon repayment of the RC Morris Indebtedness. It is the Company’s view that none of the shareholders of the Company, including Mr. Gagnon and Mr. Scholten, will be excluded from consenting to the Transaction because the Transaction is not subject to the provisions of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

The Agility Board of Directors formed a special committee (the “Special Committee”), comprised of independent board members, to review the Transaction and any other strategic alternatives for the Company and to report back to the Board.  After giving careful consideration to the information provided to it by management, the advice received from its legal advisors and other information, factors and risks that it deemed to be relevant, the Special Committee unanimously determined that: (i) the Transaction was designed to improve the financial position of the Company; (ii) the terms of the Transaction are reasonable in the circumstances of the Company; and (iii) unanimously recommended to the Board that the Company enter into the Purchase Agreement.

Having taken a thorough and thoughtful review and consideration of information concerning Agility, Alliance and the Transaction, and after consulting with its legal, tax and financial advisors, Agility’s senior management and the Special Committee, and following the unanimous favourable recommendation of the Special Committee, the Board unanimously recommended that the Shareholders consent to the Transaction.

The Transaction is expected to close on February 28, 2018.

About Agility Health

In Canada, Medic Holdings Corp., Agility Health’s Canadian subsidiary, operates twelve foot care clinics and manufactures orthotics and prosthetics.

Through its U.S. subsidiary and principal operating entity, Agility Health, LLC, Agility Health operates a multi-state network of outpatient rehabilitation clinics and provides contracted services to hospitals, nursing homes and other institutional clients, providing care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers, and a variety of other injuries and conditions.  In addition, Agility Health provides a number of ancillary services related to physical rehabilitation, including practice management software systems and custom orthotics. As of December 31, 2017, Agility Health operates 84 outpatient or onsite rehabilitation locations in 16 states. Agility Health’s contract therapy services business provides rehabilitative services to 36 hospitals and inpatient rehabilitation units and 37 nursing homes, long-term care facilities and other service locations in 11 states.

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Forward-Looking Information

This press release contains forward-looking statements regarding Agility Health and its business. Such statements are based on the current expectations and views of future events of Agility Health’s management.  In some cases the forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “plan”, “anticipate”, “intend”, “potential”, “estimate”, “believe” or the negative of these terms, or other similar expressions intended to identify forward-looking statements.  The forward-looking events and circumstances discussed in this release, including the timing of the closing of the Transaction, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company.  No forward-looking statement can be guaranteed.  Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information.  Accordingly, readers should not place undue reliance on any forward-looking statements or information.  Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Agility Health undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future events, or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information, please contact:

Mr. Patrick Reid
Chief Financial Officer
(616) 608-1824