TSX Venture Investing

Convalo Health International executes acquisitions in June

Test 1 > Convalo Health International executes acquisitions in June

Convalo Health International Corp. (CXV:TSXV) was down another 3% Thursday to $0.485 per share on nearly 1 million shares traded by 1:59 PM EST. Its shares have been trending lower for months since hitting a high of$0.82 per share in late-April.

Aside from Convalo Health‘s announcement to become a Tier 1 issuer on the TSX Venture Exchange in mid-June the company has been relatively quiet since announcing its purchase agreement with Hollywood Detox.

Convalo Health closes acquisitions in June to boost revenue

Convalo Health is following in Patient Home Monitoring’s footsteps in respect to acquiring revenue via acquisitions.

On June 10th, Convalo Health announced the execution of the final binding purchase agreements for the acquisition of Hollywood Detox Center (Hollywood Detox) and Accredited Rehab and Treatment Services (ARTS), two profitable southern California companies.

Michael Dalsin, Chairman and CEO, of Convalo and current Chairman and Former CEO of Patient Home Monitoring (TSXV:PHM) has proven his ability to seek out acquisition worthy companies, willing to be taken over by Convalo and PHM.
Convalo Health is betting on the expansion of the additions treatment market in the coming years.

Marketdata Enterprises, founded in 1979, has been publishing independent market research studies for 35 years published an article in 2014 titled $35 Billion U.S. Addiction Rehab Industry Poised For Growth. Below is a short excerpt:

  • “Marketdata analysts estimate that the drug, alcohol and other addictions treatment industry will be worth $35 billion this year. Moderate 5.2% annual growth in revenues is forecast through 2018. The states provide most of the funding, and insurance coverage is still scarce.
  • The industry is comprised of 14,000+ treatment facilities and growing. The typical treatment center has 40 patients and has annual revenues of $548,000.”

source: http://www.marketdataenterprises.com/wp-content/uploads/2014/01/Addictio…

 

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In Convalo Health’s June 10th’s amended press release Convalo Health reported that:

“Hollywood Detox and ARTS are behavioral health facilities offering detox and residential treatment services for both men and woman in and around the Hollywood and central Los Angeles area.”

Convalo explained that:

“When added to the outpatient treatment services currently offered by BLVD Treatment Centers, Convalo now has a full service behavioral health platform spanning Hollywood and Central Los Angeles capable of treating patients at every level of the addiction treatment continuum. The combined annual revenue run-rate for this Hollywood and Central Los Angeles business now exceeds $23,000,000 and annualized run rate Adjusted EBITDA now exceeds $5,500,000.”

Click here to read the entire press release.

Convalo Health traded more than 1.6 million shares on the 10th of June and traded to a high of $0.61 per share.

Convalo Health’s share price trends lower

Convalo Health – 3 Month Chart

convalo-3month

Convalo’s share price has fluctuated in recent months as investors struggle to value the company and its earning potential.

When a company’s stated focus is to “rolling up the US addiction rehabilitation market” a single transaction can change the make-up and every metric related to the said company’s financials. This element has clearly benefited Convalo Health and its liquidity in recent months on the TSX Venture.

Looking back at Convalo’s June 10th press release, the company reported:

“By the end of the year, Convalo will expand this platform to include additional detox and residential treatment centers for both men and women on the west side of Los Angeles.”

Click here to read the entire press release.

The market is looking for Convalo Health to deliver on its forecasted revenue and EBITDA in its next quarterly financials. Convalo’s market cap hovered in the $77.5 million range Thursday afternoon.

 

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