Digirad Corporation Announces Closing of DMS Health Technologies Acquisition and Associated Financing From Wells FargoPosted on: 01.05.16 by Digirad
SUWANEE, GA and FARGO, ND, Jan. 05, 2016 (GLOBE NEWSWIRE) — Digirad Corporation (NASDAQ:DRAD) (“Digirad” or the “Company”), the leader in providing healthcare solutions on an as needed, when needed, and where needed basis, announced today that it has closed the acquisition of DMS Health Technologies, Inc. (“DMS Health”) as of January 1, 2016.
As previously announced the Company expects the new combined Digirad entity to generate pro forma annual revenue and adjusted EBITDA of over $125 million and $17 million, respectively.
The Company also announced closing on a senior secured credit facility from Wells Fargo Bank, with a total commitment for up to $40 million that the Company used to partially fund the transaction along with cash on hand. At a fully funded level, the current weighted average interest rate of the senior facility is approximately 3.24%.
Headquartered in Fargo, North Dakota, DMS Health has approximately 250 employees. DMS Health’s diverse portfolio of medical equipment and diagnostic imaging services provide healthcare systems with access to the technology necessary to provide exceptional patient care in today’s rapidly changing healthcare environment throughout the United States.
In connection with the acquisition and as a material inducement to entering into employment with Digirad, on January 1, 2016 (the “Grant Date”), Digirad granted 20,000 restricted stock units to R. William Vogel, and 10,000 restricted stock units to each of two other newly hired employees as inducement awards under NASDAQ Listing Rule 5635(c)(4) (the “Inducement Awards”). Mr. Vogel will serve as the Chief Executive Officer of DMS Health Technologies, Inc. The Inducement Awards will vest, subject to the recipient’s continued service, in equal annual installments over three years following the Grant Date. The Inducement Awards were approved by the Compensation Committee of the Board of Directors of Digirad and granted under the Digirad’s 2011 Inducement Stock Incentive Plan (the “Plan”). The Inducement Awards were granted in reliance upon the exception provided under NASDAQ Listing Rule 5635(c)(4) and are subject to the terms of the Plan and the award agreements entered into with each recipient.