CRH Medical (CRHM) spiked Monday after Well Health Technologies agreed to buy the provider of medical products and clinical, marketing and operational support to gastroenterologists for $4 a share cash, or $292.7 million.
Shares of CRH Medical at last check jumped 82% to $3.96.
Well Health Technologies operates primary-care clinics in British Columbia. Both companies are based in Vancouver.
Well Health intends to finance the deal with cash on hand, funds raised from institutional and individual investors, and debt facilities provided by Canadian Imperial Bank of Commerce and HSBC Bank Canada.
The companies hope to close the deal in the second quarter, subject to conditions including court approval and regulatory clearances.
For Well Health, the deal "will significantly boost our revenue and [earnings before interest, taxes, depreciation and amortization] profile, dramatically enhance our U.S. operations, and provide us with additional inorganic and organic growth opportunities,” said Hamed Shahbazi, Well Health's chairman and chief executive, said in a statement.
The proposed deal will boost Well's revenue per share by 120% and Ebitda per share by 800%, Well said.
The acquisition enables Well Health to apply its expertise in digitization and modernization of health-care clinics to gastrointestinal practices in the U.S., he said.
After the deal closes, CRH will be led by its current chairman and CEO, Tushar Ramani.
"We are confident that today’s transaction will benefit patients and providers in our ecosystem,” Ramani said in a statement.
Citi is lead financial adviser to CRH, with Canaccord Genuity also providing advice. Blake, Cassels & Graydon and Skadden, Arps, Slate, Meagher & Flom are CRH's legal advisers on the deal.