MISSISSAUGA, Ont. - CML HealthCare Inc. (TSX:CLC) it is selling its diagnostic imaging business in Alberta to Canada Diagnostic Centres for $17 million.
The sale to the Alberta-based imaging provider, was one of two deals announced Monday by Mississauga, Ont.,-based CML. The company is also acquiring Hemostasis Reference Laboratory Inc., a Hamilton, Ont, concern that provides specialized laboratory testing services, for an undisclosed sum.
The deal with Canada Diagnostic Centres involves all of CML's Alberta operations comprised of nine imaging clinics in Calgary, Edmonton and Fort Saskatchewan. The clines had collective revenues of $20.8 million in the 12 months ended June 30.
The transaction is expected to close before the end of the year.
"The Alberta imaging operation has been under increased competition due to the lack of barriers to obtaining licences in that province and a shortage of qualified technologists," CML president and CEO Thomas Wellner said in a statement explaining the reasons for selling.
"By exiting a challenging market dominated by large local practice groups, we can redeploy our efforts and capital into new areas of growth which will diversify our tests, services and payor base as per our stated strategic plans."
Meanwhile, Wellner said CML is "very excited" about the Hemostasis acquisition "as we believe it is a great platform for growth in their areas of expertise."
"While the current financial impact from HRL on the overall CML consolidated results is modest, the acquisition will be immediately accretive to cash flow and the company's compound annual growth rate of over 20 per cent during the past several years has been very impressive."
Hemostasis Reference Laboratory provides specialized laboratory testing services in the areas of coagulation for clients around the world.
Its customers include diagnostic manufacturers, pharmaceutical research, clinical research and contract research organizations in Canada, the United States, Europe and Australia.
CML is a medical diagnostic services provider operating 140 laboratory patient service centres in Ontario and 103 imaging patient service centres in Ontario, Alberta and British Columbia.