17th Sep 2019 09:21
(Alliance News) - Watchstone Group PLC said Tuesday its has agreed to sell its Canadian healthcare services business for CAD36.2 million, about GBP22.3 million, to LM Holdings Corp.
Shares in the technology firm were up 7.0% at 99.52 pence on Tuesday morning in London.
The Canadian healthcare services business comprises national healthcare firm PT Healthcare Solutions Corp and clinic management software firm Innocare, and is held under Watchstone's Canadian subsidiary Quindell Services Inc.
The initial sale price is on a cash and debt free basis. Quindell will be due up to a further CAD800,000, conditional on the Healthcare business hitting an agreed target revenue in the first year after its acquisition.
The acquisition is subject to several conditions, including the receipt of change-of-control consents. Once all conditions are satisfied, the deal is expected to be completed on September 30, with a long stop date of November 29, Watchstone said.
Once the deal is completed, cash proceeds from the sale, net of transaction costs and the cost of redeeming outstanding preference shares in ptHealth, will be kept on deposit, until Watchstone can make a distribution to shareholders.
However, the group said no capital distribution can be made until the Slater & Gordon litigation has been resolved.
Back in 2017, Australian law firm Slater & Gordon made a claim of GBP637 million related to its 2015 acquisition of the professional services arm of Watchstone. Slater & Gordon claimed that Watchstone - then known as Quindell PLC - had fraudulently misrepresented the unit during the sale. Watchstone has since launched a GBP63 million counterclaim against Slater & Gordon.
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