Andlauer Healthcare Group Announces Completion of Complementary Tuck-In Acquisitions

TORONTO, Oct. 5, 2020 /CNW/ - Andlauer Healthcare Group Inc. (TSX: AND) ("AHG" or the "Company") today announced that it has acquired all of the issued and outstanding shares of TDS Logistics Ltd. ("TDS") and McAllister Courier Inc. ("MCI"), two regionally focused temperature-controlled transportation businesses, from Andlauer Management Group Inc. ("AMG") for a purchase price of approximately $15.9 million in cash, funded from existing cash flow from operations. These complementary tuck-in acquisitions are expected to increase the reach of AHG's services and expand its market presence in Ontario. Together, the two companies generated approximately $22 million of net revenue in 2019.

AMG initially acquired its interest in each of TDS and MCI in 2018 and 2015, respectively, and had contractual options to acquire the remaining stake in both companies that were exercised in September and May 2020, respectively. Following the exercise of such options, AMG offered the Company the opportunity to acquire the businesses at a substantially similar valuation multiple to that paid by AMG.

"It made logical sense to acquire these partners as they complement the objective of broadening AHG's network," said Michael Andlauer, Chief Executive Officer of AHG. "We have a very clear sense of how to integrate the businesses into our operations because we have been collaborating with them for several years and have a number of common customers."

About the Acquired Companies

TDS is a dedicated ambient transportation service provider, with a fleet of 98 temperature-controlled vehicles. TDS provides dedicated deliveries to pharmacies, hospitals, and clinics in the Greater Toronto Area, with an extended reach to Hamilton, Barrie, Hanover and the Niagara region.

MCI is a logistics provider offering a wide range of transportation services from courier and LTL shipments to expedited and dedicated delivery service. Founded to meet the varied transportation needs of carriers and logistics providers within the Chatham – Windsor corridor, MCI has been serving its customers since 1993.

Multilateral Instrument 61-101

AMG is a private corporation owned and controlled by Michael Andlauer, the Chief Executive Officer and a director of the Company. As a result, the acquisition constitutes a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The acquisition was reviewed and considered by a special committee of the Company's independent directors. The special committee, with the assistance of independent legal counsel, took a lead role in respect of the examination, review and negotiation of the acquisition and related documentation on behalf of the Company. The acquisition was not subject to the formal valuation and minority approval requirements of MI 61-101 as the fair market value of the transaction is not more than 25% of the Company's market capitalization.

Advisors

Goodmans LLP acted as legal counsel to AHG and Stikeman Elliott LLP acted as independent legal counsel to AHG's special committee of independent directors. Feltmate Delibato Heagle LLP acted as legal counsel to AMG.

About AHG

AHG is a leading and growing supply chain management company offering a robust platform of customized third-party logistics ("3PL") and specialized transportation solutions for the healthcare sector. The Company's 3PL services include customized logistics, distribution and packaging solutions for healthcare manufacturers across Canada. AHG's specialized transportation services, including air freight forwarding, ground transportation, dedicated delivery and last mile services, provide a one-stop shop for clients' healthcare transportation needs. Through its complementary service offerings, available across a coast-to-coast distribution network, the Company strives to accommodate the full range of its clients' specialized supply chain needs on an integrated and efficient basis. For more information on AHG, please visit: www.andlauerhealthcare.com.  

Forward-looking Information

This news release may contain forward-looking statements (within the meaning of applicable securities laws) including, without limitation, statements regarding the general financial and market impact that the acquisition of TDS and MCI is expected to have on the Company and that the acquisitions will expand the Company's market presence. The forward-looking statements in this news release are based on certain assumptions, including without limitation that the companies will continue perform as they have recently. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the risk that the acquired businesses will not perform as expected, the Company will not be able to successfully integrate the acquisitions, and the factors discussed under the heading "Risk Factors" in the Company's annual information form dated March 12, 2020 available on the Company's profile on SEDAR at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE Andlauer Healthcare Group Inc.

Peter Bromley, Chief Financial Officer, Tel: [phone]; Bruce Wigle, Investor Relations, Tel: [phone]