Source: Salona Global Medical Device Corp.
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  • Salona Global Medical Device Corporation (SGMD) has signed a non-binding letter of intent to acquire rehabilitation and sports medicine device assets
  • The company also executed a definitive agreement to acquire DaMar Plastics
  • When completed, both acquisitions will boost the revenues of SGMD by more than 60 per cent
  • Salona Global Medical Device Corp is a U.S.-based, acquisition-focused medical device company
  • Salona Global Medical Device Corporation was up 8.333 per cent, trading at $0.78 at 10:49 AM ET

Salona Global Medical Device Corporation (SGMD) has signed a LOI to acquire rehabilitation and sports medicine device assets.

These assets have unaudited annual revenues of $26 million with gross margins of over 30 per cent.

Also, the company has agreed to acquire DaMar Plastics Manufacturing, Inc., a plastics business with $6.38 million in annual revenue and 47 per cent gross profits.

These acquisitions will boost SGMD’s revenues by more than 60 per cent.

Between cash on the balance sheet and debt financing in place from an existing US lender, SGMD has sufficient funds to close both acquisitions.

Under the LOI, Salona Global would acquire the assets, including net positive working capital and no long-term debt, in an all-cash transaction for approximately US$8 million structured as a payment of $6 million upon closing and $2 million on the first anniversary.

SGMD plans to use its cash on the balance sheet for the initial payment and enterprise cash flow from operations for the final payment assuming no debt at the parent level.

With over 50 years in business, DaMar Plastics currently serves the medical and consumer industries with precision plastics molding technology.

The acquisition supports the company’s strategy to create a fully integrated global medical device company and would add precision plastics technology capabilities to the company.

“Through vertical integration, we expect this acquisition will continue to improve our gross margins while further expanding our customer base, revenue streams, and bottom line,” noted Salona Global CEO Luke Faulstick.

“We’re intent on closing both of these deals as quickly as we can, and we are fortunate to have managed our balance sheet such that we don’t have a need for equity financing to close them,” said Salona Global Executive Chairman Les Cross.

Salona Global Medical Device Corp is a US-based, acquisition-focused medical device company.

Salona Global Medical Device Corporation was up 8.333 per cent, trading at C$0.78 at 10:49 AM ET.


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