BASKING RIDGE, N.J.--(EON: Enhanced Online News)--Hooper Holmes (NYSE MKT:HH) today announced the closing of the sale of the Company's Portamedic service line to American Para Professional Systems, Inc. for $8.1 million in cash, after adjustments. In addition, Hooper Holmes has retained its existing Portamedic working capital. The definitive agreement between the two companies was announced on August 15, 2013.
“Our call center, risk assessment and outsourced underwriting expertise uniquely equip us to meet the needs of our customers. We are committed to building a lean, competitive organization and expanding our Health and Wellness capabilities.”
The transaction provides Hooper Holmes with capital to invest as it focuses on growth supporting wellness programs, clinical research and government studies. Heritage Labs' testing, kit assembly and product fulfillment capabilities are expected to grow, while the Company's call center and outsourced underwriting services remain unique health information and risk assessment assets.
"Today, we begin a new focus for Hooper Holmes as a national Health Information and Health Risk Assessment Company," said Ronald V. Aprahamian, Chairman of the Board. "As a result of this transaction, we have improved our balance sheet with cash on hand, and can now provide improved services to our current clients and pursue the growing Health and Wellness industry. We believe these efforts will lead us to profitable operations and provide improved results for our shareholders."
"Our national network of health professionals, proprietary technology platform and Heritage Labs operations are unmatched assets,” said Henry E. Dubois, President and CEO of Hooper Holmes. “Our call center, risk assessment and outsourced underwriting expertise uniquely equip us to meet the needs of our customers. We are committed to building a lean, competitive organization and expanding our Health and Wellness capabilities."
The overall market for Hooper Holmes services is expected to grow. Under the wellness rules for the Affordable Care Act that take effect next January, companies can offer a reward of up to 30 percent of health costs for employees who complete a participatory program like a risk assessment, or biometric tests like waist measurement. According to the 2013 RAND Workplace Wellness Program Study, about half of all employers with 50 or more employees already offer wellness programs, and almost half of employers with a wellness program conduct biometric screenings such as those provided by Hooper Holmes.
"We are looking forward to new opportunities to support the national drive to promote health-related behaviors and educate employees about health risks. Through our improved capital position and high growth business strategies, we believe we have the potential to profitably grow revenues to $100 million in annual sales over the next four to six years," added Mr. Dubois.
Cantor Fitzgerald & Co. acted as the financial advisor to Hooper Holmes.
About Hooper Holmes
Hooper Holmes has three divisions. Hooper Holmes Health & Wellness performs risk assessment and risk management services including biometric screenings, health risk assessments and onsite wellness coaching for wellness companies, disease management organizations, clinical research organizations and health plans. Heritage Labs tests millions of samples annually and helps insurers better applying the predictive powers of today’s tests. Hooper Holmes Services provides integrated data collection, tele-interviewing and underwriting services.
This press release contains “forward-looking” statements, as such term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Company’s current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions. Among the important factors that could cause actual results to differ materially from those expressed in, or implied by, these forward-looking statements are our ability to successfully implement our business strategy; uncertainty as to our working capital requirements over the next 12 to 24 months; our ability to maintain compliance with the financial covenant in our credit facility; our expectations regarding our operating cash flows; and the rate of life insurance application activity. Additional information about these and other factors that could affect the Company’s business is set forth in the Company’s annual report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission on April 1, 2013. The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release to reflect the occurrence of unanticipated events, except as required by law.