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Mr. Grant Robertson reports,
KAMLOOPS, B.C. - Audiotech Healthcare Corporation (AUD:TSX Venture Exchange) is pleased to announce that it has entered into a letter of intent to acquire a 25% equity interest in Lobe Purchasing Group Inc. (Lobe Regroupement d'Achats Inc.), hereinafter referred to as "Lobe", the largest hearing product provider in Eastern Canada. Lobe, which is a subsidiary of Lobe Hearing Heathcare, currently manages a total of 15 clinics in Eastern Canada.
The letter of intent specifies that Audiotech will issue a total of 900,000 common shares with a deemed value of $0.22 per share to acquire the 25% equity stake in Lobe. Audiotech will also pay a finders fee in conjunction with the transaction. The finders fee will be satisfied through the issuance of 100,000 common shares with a deemed value of $0.22 per share.
Management believes that the union of Audiotech and Lobe under this agreement brings several advantages to both companies. Most notably, it creates the platform to commence the joint creation of a truly national network of hearing care clinics. Whereas Audiotech's existing geographic focus is Western Canada, Lobe's existing clinic network and managerial experience lies in Eastern Canadian markets including Ontario and Quebec. The two companies will be combining their purchasing interest, thereby immediately creating one of Canada's largest groups of affiliated hearing care clinics.
"This investment will not only make Audiotech and Lobe one of the largest hearing care concerns in Canada, but this transaction is expected to be immediately accretive to Audiotech's earnings per share," stated Audiotech's President & CEO Osvaldo (Ozzie) Iadarola. " This transaction is the first step in Audiotech's plans to becoming the first nationwide hearing care provider in Canada."
It is expected that the definitive purchase agreement will include provisions whereby Audiotech will have the opportunity or right to acquire an additional equity interest in Lobe in the future.
The acquisition is subject to a number of conditions, including the satisfactory outcome of a financial and operational due diligence process to be completed by Audiotech and the receipt of all necessary regulatory approvals. Subject to the negotiation of a definitive agreement, it is anticipated that the acquisition will be completed on or before February 28, 2005.
The company's shares are listed and posted for trading on Tier 1 of the TSX Venture exchange under the symbol "AUD." For more information on the company, contact Osvaldo (Ozzie) Iadarola, President & CEO, at (250) 372-5847, or Doren Quniton of QIS Capital, investor relations, at (250) 376-8989, or visit the company's website at www.audiotech.org.
AUDIOTECH HEALTHCARE CORPORATION
First Bank Building
760-175 Second Avenue
Kamloops, B.C. V2C 5W1
Phone: (250) 372-5847
Fax: (250) 372-3859
Email: info@audiotech.org
This press release contains "forward-looking statements" as defined under securities laws, including statements concerning the Company's plan to acquire shares in Lobe, and to establish a nationwide network. Actual results may differ materially and adversely from those described herein depending on a number of factors, including an inability to complete the stated transaction described in the press release herein; develop a nationwide network; general economic and hearing aid market conditions; the competitive performance and features of products; changes in government healthcare systems and reductions in reimbursement levels for hearing aids; difficulties in integrating and managing acquired operations that could result in poor performance and write downs of acquired intangible assets; the effect of future acquisitions or strategic partnerships and other business factors beyond our control. For additional information regarding the risks inherent in our business, please see all information filed from time to time with the Exchange and all related Securities Commissions.
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