Salona Global Medical Device Corporation Announces Execution of a Non-Binding Agreement to Acquire a US$14M in Annual Revenue Physical Therapy Medical and Equipment Business with 35% Gross Margins

SAN DIEGO, June 09, 2022 (GLOBE NEWSWIRE) -- Salona Global Medical Device Corporation (“Salona Global”, “SGMD” or the ‎‎“Company”) (TSXV:SGMD), ‎a fully integrated acquisition focused medical device company serving the global injury and surgery recovery (known as recovery science) market, announced today that on May 27, 2022 it executed a non-binding agreement (“Agreement”) to acquire a cash flow positive medical device business. The Company has come to financial terms to acquire a company providing medical devices and equipment for physical therapy clinics in the U.S. (“Acquisition Target”). According to preliminary due diligence, the Acquisition Target has unaudited annual revenues of approximately US$14M. It reported 35% unaudited gross margins, has a strong balance sheet relative to revenue, and is generating free cash flow. This potential acquisition would improve the Company’s gross margin, putting the Company on plan to meet its stated 40% gross margin target. Management believes this cash flow and asset base can be leveraged to close the deal.