LIFE HEALTHCARE GROUP HOLDINGS LIMITED - Alliance Medical Group (AMG) restructure

Release Date: 12/06/2018 17:06
Code(s): LHC
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Alliance Medical Group (“AMG”) restructure

Life Healthcare Group Holdings Limited
Incorporated in the Republic of South Africa
Registration Number: 2003/002733/06
ISIN: ZAE000145892
Share Code: LHC
("Life Healthcare" or "the Company" or "the


Life Healthcare acquired Alliance Medical Group ("AMG") in November 2016. This
acquisition was in line with the Company’s vision to be a market-leading, international,
diversified healthcare provider offering high-quality, cost-effective care in its chosen markets.
The AMG business has since performed well and, importantly, is delivering its growth
agenda in each of its market territories.

The diagnostic business is a core business line in the Life Healthcare stable and is seen as
an important growth opportunity for the Group. To this end, the Group has embarked on an
integration strategy for the AMG business which will result in more streamlined processes,
improved decision making, operational synergies and sharing expertise within the Group. In
order to implement the integration strategy, Life Healthcare and the management of AMG
have agreed on the following re-structuring:

Management integration

Guy Blomfield, who has been the Chief Executive Officer of AMG for seven years, will now
transition to being a Non-Executive Director of Life UK (encompassing all AMG’s businesses)
to drive business development and ensure continuity. Nick Burley, the Chief Financial Officer,
will also transition in the same way. Both Guy and Nick will remain on the ongoing long term
management incentive plan reflecting their continued commitment to AMG.

Dr Charles Niehaus, Life UK Group CMO/COO, will remain with AMG in his existing capacity.
Charles joined AMG in 2011 from General Healthcare Group and has been responsible for
the strategic clinical initiatives as well as playing a strong operational role in the business.

The above builds off, and has been preceded by, a number of senior management additions
within the existing AMG territories to further strengthen the leadership team since the
acquisition in 2016. In 2017, Mark Chapman was appointed as the UK CEO and Russell
Trenter the Group Commercial Director responsible for the drive towards static long term
facilities and contracts with the hospital trusts. In addition, Howard Marsh was appointed
Managing Director of the Molecular Imaging business (including Northern Europe). The UK
team was further strengthened in early 2018 through the recruitment of a Financial Director,
Ed Lunt, and a Commercial Director, David Cahill, to focus on operational delivery and cost

The Italian and Ireland operations will continue to be managed by the existing CEOs Beatrice
Arlenghi and Malcolm Banks.


At the time of the acquisition in 2016, key management within AMG re-invested £33.0 million
to acquire 6.22% of AMG through the acquisition of B-shares. In terms of the Original
Shareholder Agreement ("OSHA"), the B-shares were to be redeemed after year 3 (45%),
year 4 (30%) and year 5 (25%) after the acquisition date. Life Healthcare in conjunction with
the AMG management has agreed to bring forward the settlement of the AMG management
B-shares. The proposal will see the B-shares settled at the September 2017 valuation of
£35.7 million. A payment will be made to management in accordance with their contracts of
employment. The payment of the B-shares, which has been fully provided for in the
accounts, will be funded from the AMG debt facility arranged in the UK in November 2017
and payment is expected to occur in June 2018.

Life Healthcare is now in a better position to accelerate the integration of AMG into the
Group whilst continuing to benefit from the executive team’s expertise in the long term. The
combination benefits of bringing AMG’s diagnostic capabilities to Life Healthcare’s other
businesses is an important part of the strategy going forward.

12 June 2018

RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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