PEABODY, Mass., May 3 /PRNewswire-FirstCall/ -- PHC, Inc., d.b.a. Pioneer Behavioral Health (BULLETIN BOARD: PIHC) , a leading provider of inpatient and outpatient behavioral health services, announced today that it has closed on the acquisition of Phoenix-based Pivotal Research Centers, LLC, significantly expanding the Company’s clinical research capabilities and geographic presence. Pivotal is expected to contribute approximately $4 million in annual revenues with net profit margins exceeding 20 percent.
Pioneer paid $1.5 million in cash and $500,000 in PHC, Inc. common stock for the transaction. Additionally, Pioneer agreed to performance-based notes which are staged during the next five years based on future profitability. Pioneer management anticipates the acquisition will be accretive to Pioneer’s earnings during fiscal 2004.
Bruce A. Shear, chairman and chief executive officer of Pioneer Behavioral Health, commented, “These recent announcements represent milestones for Pioneer as we dramatically expand our clinical research capabilities, enhance our management team and improve our cash flow and operating income. Pivotal brings a top-tier client base, state-of-the-art competencies, and more than a decade of experience to the Pioneer family. We have already begun to exploit the synergies of this combination by integrating Pioneer’s existing clinical operations into Pivotal’s. We expect the combination to increase Pioneer’s revenues by more than 20 percent during the next fiscal year and to be immediately accretive to corporate earnings. We look forward to leveraging the Pivotal team with ours, and utilizing their contacts and capabilities to make Pioneer a stronger organization. In particular, Pivotal’s founder, Louis Kirby, MD., and Mike Colombo, CEO bring the background and the reputation within the industry to become an integral part of our leadership team. We are excited about the long-term potential from this transaction.”
Mike Colombo, CEO, commented on the acquisition; “The synergies and combined resources of our two companies together will allow us to grow at a much faster rate. Plans are already in place to open a new research center in the Las Vegas market.”
Pivotal performs all phases of clinical research for Phase I-IV drugs under development through two dedicated research sites, including one of the largest single psychiatric sites in the country. Pivotal currently has approximately 22 enrolling studies and an additional 31 ongoing studies with approximately 75-80 percent of Pivotal’s research activity in central nervous system (CNS) research. With a current client base including AstraZeneca, Bristol Meyers Squibb, Cephalon, Forest, GlaxoSmithKline, Lilly, Merck, Mylan, Novartis, Organon, Sepracor and Wyeth, the Company currently has protocols in Alzheimer’s disease, ADHD, Diabetes Type II, Generalized Anxiety Disorder, Insomnia, Major Depressive Disorder, Obesity, Pain, Parkinson’s Disease, and Shift Work Sleep Disorder.
Pioneer also completed a private placement of approximately 2 million shares of its common stock, which consisted of shares and warrants priced at $1.10 with a three-year term. The private placement facilitated the closing of the acquisition without incurring any additional bank debt, and also provides the necessary working capital for Pivotal to execute its business plan.
Mr. Shear concluded, “We would like to welcome our new shareholders and thank the various institutional investors who showed unwavering support of this business opportunity by participating in this private placement.”
Bathgate Capital Partners, a full service investment banking firm based in Denver, acted as agent in the acquisition of Pivotal and participated in the private placement.
About Pivotal Research Centers, LLC
Pivotal Research Centers consists of two high performance and professionally managed investigative sites in the Phoenix metropolitan area with expertise in performing large, complex clinical research studies including phase I, Ib and IIa, III and IV. The sites, one in Peoria/Sun City and the other in Mesa/East Valley, are each staffed with an experienced principal investigator and study staff. With comprehensive facilities, Pivotal’s 35 research professionals deliver top performance to pharmaceutical and CRO partners.
About Pioneer Behavioral Health
Pioneer Behavioral Health contracts with national insurance companies, major transportation and gaming companies to provide behavioral health services. Pioneer also owns and operates Wellplace.com, a leading provider of Internet and 24/hr telephonic based behavioral health services to consumers and other segmented populations, and Pioneer Pharmaceutical Research, a growing clinical trials company. For more information visit http://www.phc-inc.com/ or http://www.haydenir.com/.
This press release may include forward-looking statements that are subject to risks and uncertainties. Forward-looking statements include information about possible or assumed future results of the operations or the performance of the company and its future plans and objectives. Various future events or factors may cause the actual results to vary materially from those expressed in any forward-looking statements made in this press release (or during this conference call). These factors and risks are discussed in the company’s annual report on Form 10-KSB for the years ended June 30, 2002 and 2003, copies of which were filed with the Securities and Exchange Commission, and in our quarterly reports on Form 10-Q filed with the Securities and Exchange Commission since October 2003.
For more information, please contact Bruce A. Shear of PHC, Inc., +1-978-536-2777; or Investor Relations, Matthew Hayden of Hayden Communications, Inc., +1-843-272-4653, for PHC, Inc.
PHC, Inc.
CONTACT: Bruce A. Shear of PHC, Inc., +1-978-536-2777; or InvestorRelations, Matthew Hayden of Hayden Communications, Inc., +1-843-272-4653, forPHC, Inc.
Web site: http://www.haydenir.com/
Web site: http://www.phc-inc.com/
