August 7, 2008 / 5:31 PM / 10 years ago

CML Healthcare results boosted by buying spree

(In U.S. dollars unless noted)

By Scott Anderson

TORONTO, Aug 7 (Reuters) - CML Healthcare CLC_u.TO, which through a series of acquisitions has quietly risen to the rank of second-biggest healthcare company on the Toronto Stock Exchange, does not plan to end its buying spree any time soon, its chief executive said on Thursday.

Paul Bristow, CML’s president and CEO, said the company, which specializes in imaging and laboratory services, expects a steady stream of purchases this year, particularly in the United States.

“We will not turn our back on Canadian (acquisitions) at all,” he told Reuters. “We cannot afford to just say we are not going to do any more Canadian acquisitions, but what you will find is that we have become more and more selective with regards to Canadian opportunities.

“We are looking for geographic concentration where we can get benefits beyond just a stand-alone clinic.”

This week the company closed six deals totaling C$27.5 million ($26.2 million) to buy 14 clinics in Ontario, Alberta and British Columbia.

And earlier this year it closed its $150.4 million purchase of American Radiology Services, giving it 15 diagnostic medical imaging centers in Delaware and Maryland.

Bristow said the company is “in discussions with several opportunities” in the United States. He said it has signed letters of intent for other purchases.

The past purchases, most notably the ARS purchase, boosted CML’s second-quarter revenue by 54 percent to C$118.6 million from C$77.2 million for the same quarter last year.

Its profit rose to C$26.3 million, or 29 Canadian cents a unit, in the quarter, up 2.3 percent from C$25.7 million, or 30 Canadian cents a unit, in the year-before period.

The steady string of acquisitions has seen the company’s market cap grow to about C$1.3 billion, up from about C$120 million when Bristow first joined the company in 1998.

But it has not been a steady string of successes. Last year, for instance, the company took a run at Montreal-based Medisys Health Group Income Fund in a bid to trump a C$37.6 million privatization bid from Medisys’s biggest shareholder.

The transaction was scuttled a month later after the two sides could not agree on terms.

“We had every intention of trying to achieve a deal...but it just didn’t work,” Bristow said. “What it did was allow us to focus more and more on other opportunities that took us back into the States.” ($1=$1.05 Canadian) (Reporting by Scott Anderson; Editing by Peter Galloway)

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