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Centric Health Agrees to Divest Physiotherapy, Rehabilitation and Assessments Operations for Gross Proceeds of up to CAD$250 Million in Cash

25 November 2015

– Company to Use Substantial Portion of Net Proceeds to Pay Down Debt, Significantly Reducing Leverage and Strengthening its Balance Sheet –

– Company to Focus on High-Growth Opportunities Across National Platform in Specialty Pharmacy and Surgical and Medical Centres –

TORONTO, Nov. 25, 2015 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH) today announced it has entered into a definitive agreement to sell substantially all of the businesses within its Physiotherapy, Rehabilitation and Medical Assessments segment to Audax Private Equity ("Audax"), an Audax Group business, for a cash purchase price at closing of CAD$245 million, subject to certain closing adjustments, plus up to CAD$5 million in contingent consideration based on the divested businesses achieving certain performance thresholds in 2016 and/or other criteria being met during the first half of 2017. The Company intends to use a substantial portion of the net proceeds from the sale, which are expected to be between CAD$230 million and CAD$235 million (excluding the up to CAD$5 million contingent consideration), to pay down debt and significantly reduce the Company's leverage.

"The divestiture of these businesses at an attractive valuation will enable us to transform our business by paying down debt, reducing our leverage and providing the financial flexibility to invest in the significant growth opportunities in the ongoing business," said David Cutler, President and Chief Executive Officer. "With a significantly strengthened balance sheet and free cash flow, we are well positioned to create meaningful and sustainable value through opportunities inherent in the Canadian healthcare industry as governments seek solutions to the economic, social and technological healthcare demands associated with an aging population."

Mr. Cutler continued, "Our leading positions and national networks in our Specialty Pharmacy and Surgical and Medical Centres businesses position each for strong organic growth and margin improvement as we drive utilization at our facilities and expand our service offerings. We will also continue to explore strategic, accretive, complementary acquisitions to further strengthen our value proposition as a national provider in our Specialty Pharmacy segment."

The businesses to be divested are composed of the Company's Physiotherapy, Rehabilitation (including Seniors Wellness and Homecare) and Medical Assessments operations which are comprised of brands including LifeMark Health, Community Advantage Rehabilitation, Centric Health Seniors Wellness, Centric Health Medical Assessments and Viewpoint Medical Assessment Services.

"We are excited by this announcement and by what it means for the Physiotherapy, Rehabilitation and Assessments operations and its dedicated professionals going forward," said Peter Stymiest, Chief Operations Officer of Centric Health's Physiotherapy, Rehabilitation and Medical Assessments Division and who will become CEO of the new entity under Audax' ownership. "Audax has long-standing and significant experience investing in the healthcare space. The expertise and strong brands of the Physiotherapy, Rehabilitation and Medical Assessments operations joined with Audax' resources represents a powerful combination."

Please click here for the complete press release.