TORONTO, ONTARIO / ACCESSWIRE / February 14, 2017 / GreeneStone Healthcare Corporation (OTCQB: GRST) ("GreeneStone" "GRST" or the "Company"), a provider of healthcare services, including addiction and mental health, has completed the acquisition of all of the stock of Cranberry Cove Holdings, which owns the real estate used by GreeneStone's addiction treatment facility in Muskoka, Ontario. This purchase was completed to allow the Company to sell its Canadian addiction treatment business so that it could pay down debt and close on its previously announced acquisition of the US-based treatment center in Delray Beach, Florida.
The first-class treatment center in Canada was developed and built by GreeneStone, which employed modern techniques and philosophies to successfully treat hundreds of clients. The Company sought to expand into the U.S., where it could revolutionize treatment in that country with the skills it acquired in Canada. Selling the Canadian operation is believed to be the best overall solution to reduce debt and advance expansion plans. The Company, through its newly acquired subsidiary, will own and lease the Muskoka clinic building to the purchaser of the clinic's operational assets.
The acquisition of Cranberry Cove Holdings was from Leon Investments, which is owned indirectly by Shawn Leon, the President and CEO of GreeneStone. The purchase of the real estate was previously approved by the shareholders in 2015, based on its appraised value of CDN$10,000,000. The total consideration paid by GreeneStone was CDN$10,000,000 and was funded by the assumption of existing debt on the real estate, the cancellation of certain indebtedness owing to GreeneStone in the amount of CDN$659,918, and the issuance of 60,000,000 shares of the Company's common stock to Leon Investments, valued at US$0.03 per share.
The sale of the operation assets of the clinic was for a total consideration of CDN$10,000,000, plus an additional CDN$3,000,000 performance payment to be received in 2019 if certain clinic performance metrics are met. The purchaser completed the sale with cash proceeds to the Company of CDN$10,000,000, of which CDN$1,500,000.00 will remain in escrow for up to two years to cover indemnities given by the Company. These two transactions closed on February 13, 2017.
Also on February 13, 2017, immediately after closing on the sale of its Canadian clinic business, GeeneStone closed on the acquisition of the business and real estate assets of Seastone addiction treatment center in Delray Beach, Florida. This business will be operated through a newly formed Florida limited liability company named Seastone Delray Healthcare LLC. The purchase price for the Seastone assets was US$6,150,000, financed with a purchase money mortgage of US$3,000,000, a US$250,000 convertible promissory note from one of the sellers of the assets, and US$2,900,000 cash. Seastone Delray Healthcare, LLC received its regular license to operate from the Department of Children and Family Services of Florida effective February 14, 2017.
"We are very pleased with this transformational event for the Company. We have been able to eliminate debt that was accumulated during the building of the Canadian business in 2012 and 2013, and we will benefit from a stable cash flow generated by rental income from the lease of the Muskoka clinic while we build the business in Florida," says Leon.
About GreeneStone Healthcare Corporation
GreeneStone Healthcare Corporation (OTCQB: GRST) operates in the behavioral healthcare space, specifically in the treatment of substance use disorders. GreeneStone developed a unique style of treatment over the last six years and has had much success with in-patient treatment for adults. Greenestone will continue to develop its programs with its expansion into the United States. For more information, you can visit our website at www.greenestoneclinic.com and www.greenestone.net.
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SOURCE: GreeneStone Healthcare Corporation