The directors of Paragon Care Limited (PGC) are pleased to announce that it has entered into an agreement to conditionally acquire all the issued capital of Axishealth Pty Ltd. Axishealth is a significant supplier of Durable Medical Equipment (DME) to the Australian health and aged care sector including hospitals, aged care facilities, general practitioners and pharmacies. Its products include medication carts, electronic hospital beds, IV stands and sophisticated pediatric cots. Products are sourced both internationally and locally and are distributed throughout Australia via reseller agreements or via the dedicated sales team employed by Axishealth. The company has exclusive distribution rights for a number of high quality products from overseas.
In the year to 30 June 2008 total revenue was $6.6 million and its major customers included public and private hospitals, medical clinics and aged care facilities. The unaudited adjusted EBIT for Axishealth for the year to 30 June 2008 was $0.67 million. The Company proposes acquiring all of the issued capital of Axishealth for a total consideration of $3.2 million, of which $2.56 million (80%) would be paid as cash, with the balance of $640,000 (20%) by way of an issue of 29,090,909 of the Company’s fully paid ordinary shares at a nominal issue price of 2.2 cents per share.
The proposed acquisition of Axishealth is conditional upon the placement of those shares and options to raise not less than $1.66 million and the arrangement of borrowings or other financial accommodation of not less than $1.8 million to fund part of the cash consideration for the Axishealth acquisition. It intends undertaking a placement on or about 30 April 2009 of 8 million new ordinary shares at 2.5 cents per share and 4 million new options exercisable at 2.0 cents on or before 31 Ma y 2012 for nil consideration, to raise $200,000 for working capital purposes. Part of the proceeds from the proposed placement of up to 72 million new ordinary shares and attached options will also be used for payment of fees associated with the acquisition and placement and strengthening the Company’s working capital position.
