Audiotech Healthcare Corp. is proceeding with negotiations with respect to its proposed acquisition of a 25-per-cent equity interest in Lobe Purchasing Group Inc. The closing of the transaction, which was originally expected to occur on or before Feb. 28, 2005, has been extended. The transaction is now expected to close on or before April 15, 2005.
Both parties requested the extension as a greater number of documents than originally expected have had to be translated from French to English, and it took longer than anticipated for the translation to be completed. Further, management of Audiotech and Lobe are jointly exploring avenues in which the scope of the association of the two entities can be expanded to enhance the growth of both organizations. Audiotech is now in possession of all required documentation to complete its due diligence review and, so far, nothing has come to management's attention to suggest that the transaction will not proceed in accordance with the original terms.
Lobe Purchasing Group manages a buying group composed of 15 hearing care clinics in Eastern Canada, making it the largest hearing product provider in the region. Management believes that the union of Audiotech and Lobe under the proposed agreement brings several advantages to both companies. Most notably, it creates the platform to begin the joint creation of a truly national network of hearing care clinics. Whereas Audiotech's existing geographic focus is Western Canada, Lobe's existing clinic network and managerial experience lies in Eastern Canadian markets including Ontario, and Quebec.
The acquisition remains subject to a number of conditions, including the satisfactory outcome of the financial and operational due diligence process to be completed by Audiotech, the negotiation of a definitive agreement and the receipt of all necessary regulatory approvals.