Exhibit 99.1
FILED BY ECHO HEALTHCARE ACQUISITION CORP. (COMMISSION FILE NO. 000-51596)
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND DEEMED FILED PURSUANT TO RULE 14A-12 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
SUBJECT COMPANY: XLNT VETERINARY CARE, INC.
FOR FURTHER INFORMATION:
AT THE COMPANY: AT FINANCIAL RELATIONS BOARD:
Joel Kanter Erin Cox
President and Secretary General Information
Echo Healthcare Acquisition Corp. (310) 854-8319
(703) 760-7888 ecox@frbir.com
FOR IMMEDIATE RELEASE
ECHO HEALTHCARE ACQUISITION CORP. AMENDS MERGER
AGREEMENT WITH XLNT VETERINARY CARE, INC.
VIENNA, VIRGINIA--FEBRUARY 20, 2007--ECHO HEALTHCARE ACQUISITION CORP. ("Echo"
or the "Company") (OTCBB: EHHA.OB), a blank check company whose securities began
trading publicly in March 2006, announced today that it has amended its merger
agreement with XLNT Veterinary Care, Inc. ("XLNT"). The primary purpose of the
amendment is to provide additional time for XLNT to complete certain financial
audits required to be included in Echo's proxy statement/prospectus to be filed
with the Securities and Exchange Commission ("SEC") to be used to obtain
stockholder approval of the merger.
Echo originally anticipated filing a registration statement with the SEC that
would include audited financial statements of XLNT and certain of its
subsidiaries through September 30, 2006. However, the SEC staff has advised Echo
that full-year audited financial statements for the fiscal year ended December
31, 2006, as well as audited financial statements of hospitals and clinics
acquired by XLNT in 2007 covering certain periods during 2007, will also be
required. As a result, the parties amended the merger agreement to extend the
deadline for delivery of the above mentioned financial statements to March 31,
2007 to provide the additional time required to complete the necessary audits.
The amended merger agreement also requires that the audited financial statements
for hospitals and clinics acquired subsequent to December 31, 2006 must be
delivered to Echo on or before May 10, 2007.
Gene Burleson, Chairman and CEO of Echo, stated, "While the requirement of
additional audited financial statements from XLNT will delay our stockholders'
vote on the proposed merger, we continue to believe in the strength of the
business and are firmly committed to executing our previously stated strategic
objective of expanding our veterinary care services and network. We are working
with XLNT to finalize the remaining audits quickly and will work to file our
registration statement as soon as possible."
In addition to extending the deadlines to accommodate XLNT's audits, the parties
also amended the merger agreement to increase the minimum pro forma revenue
threshold to be achieved by XLNT from $48.0 million to $57.5 million for the
twelve months ended December 31, 2006. The merger consideration to be received
by XLNT's stockholders will still be determined based on XLNT's revenue for the
twelve months ended December 31 2006 (determined on a pro forma basis to include
all hospitals and clinics acquired by XLNT prior to March 31, 2007) up to $60
million multiplied by 2.00. The amended merger agreement also provides that XLNT
revenues in excess of $60.0 million will generate additional merger
consideration based on a multiple of 1.15. In recognition of the delay resulting
from the financial statement requirements discussed above, the merger agreement
has been further amended to provide that the dollar value of the merger
consideration to be received by XLNT's stockholders will be increased by a
formula amount that will enable XLNT's stockholders to participate along with
Echo's stockholders in any benefits realized from improvements in revenue
generation, EBITDA and EBITDA margin achieved by XLNT during the period between
January 1, 2007 and the closing of the merger.
XLNT has agreed to temporarily suspend its acquisition program as of March 31 to
finalize all financial statement requirements in order to enable Echo to seek
stockholder approval of the proposed merger. During this period, XLNT's
management will focus on integrating all hospitals and clinics acquired prior to
that date and on improving operations.
In addition, the termination date of the merger agreement was extended from
October 31, 2007 to March 21, 2008 to accommodate the additional time needed to
finalize XLNT's audits.
ABOUT XLNT VETERINARY CARE, INC.
XLNT Veterinary Care, Inc. is a provider of veterinary primary care services to
companion animals through a network of fully-owned veterinary hospitals. XLNT
currently owns and operates 20 veterinary hospitals and clinics in the state of
California.
ABOUT ECHO HEALTHCARE ACQUISITION CORP.
Echo Healthcare Acquisition Corp. is a blank check company that was formed on
June 10, 2005 to serve as a vehicle for the acquisition of one or more domestic
or international operating businesses in the healthcare industry. On March 22,
2006, Echo consummated its initial public offering ("IPO") of 6,250,000 Units.
On March 27, 2006, the Company consummated the closing of 937,500 additional
Units subject to the underwriters' over-allotment option. The 7,187,500 Units
sold in the IPO (including the 937,500 Units subject to the underwriters'
over-allotment option) were sold at an offering price of $8.00 per Unit, which
together with the private placement of the 458,333 warrants to certain
stockholders and directors of the Company at an offering price of $1.20 per
share, generated total gross proceeds of $58,050,000. Of this amount,
$54,947,000 was placed in trust. Echo common stock trades on the OTC Bulletin
Board under the symbol EHHA.OB. To learn more about Echo, visit the website at
HTTP://WWW.ECHOHEALTHCARE.COM.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
Echo plans to file a Registration Statement on Form S-4 with the Securities and
Exchange Commission ("SEC") in connection with the merger, and Echo expects to
mail a Proxy Statement/Prospectus to stockholders of Echo concerning the
proposed merger transaction. INVESTORS AND SECURITY HOLDERS OF ECHO ARE URGED TO
READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS AND THE OTHER
RELEVANT MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING
OR INVESTMENT DECISION WITH RESPECT TO THE MERGER BECAUSE THESE MATERIALS WILL
CONTAIN IMPORTANT INFORMATION ABOUT ECHO, XLNT, THE MERGER AND RELATED MATTERS.
Investors and security holders will be able to obtain the documents free of
charge at the SEC's web site at www.sec.gov. In addition, investors and security
holders may obtain free copies of the documents filed with the SEC by Echo by
directing a written request to: Corporate Secretary, Echo Healthcare Acquisition
Corp., 8000 Towers Crescent Drive, Suite 1300, Vienna, VA 22182.
In addition to the Registration Statement and Proxy Statement/Prospectus, Echo
files annual, quarterly and special reports, proxy statements and other
information with the SEC. THE FOREGOING INFORMATION REGARDING THE AMENDMENTS TO
THE MERGER AGREEMENT IS A SUMMARY OF SUCH AMENDMENTS AND DOES NOT DISCUSS ALL OF
THE CHANGES THAT ARE INCLUDED IN THE AMENDED MERGER AGREEMENT, SOME OF WHICH MAY
BE MATERIAL TO INVESTORS. You may read and copy any reports, statements or other
information filed by Echo (including the amended merger agreement) at the SEC
public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference room.
Echo's filings with the SEC are also available to the public from commercial
document-retrieval services and at the SEC's web site at www.sec.gov.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Echo will be soliciting proxies from the stockholders of Echo in connection with
the merger and issuance of shares of Echo common stock in the merger. In
addition, Morgan Joseph & Co. Inc. ("Morgan Joseph"), Roth Capital Partners, LLC
("Roth"), the directors and executive officers of Echo and the directors,
officers and affiliates of XLNT may also be deemed to be participants in the
solicitation of proxies. Information about Morgan Joseph, Roth and the directors
and executive officers of Echo is set forth in the prospectus filed with the SEC
on March 17, 2006. Information about the directors and executive officers of
XLNT as well as updated information about Morgan Joseph, Roth and the directors
and officers of Echo will be included in the Proxy Statement/Prospectus. Morgan
Joseph, Roth, and the directors and executive officers of Echo and XLNT have
interests in the merger, some of which may
differ from, or may be in addition to those of the respective stockholders of
Echo generally. Those interests will be described in greater detail in the Proxy
Statement/Prospectus with respect to the merger, which may include potential
fees to Morgan Joseph and Roth, employment relationships, potential membership
on the Echo Board of Directors, option and stock holdings and indemnification.
SAFE HARBOR STATEMENT
Except for the historical information contained herein, the matters set forth in
this press release, including, but not limited to, statements as to the expected
benefits of the combination of the two companies, veterinary hospital
acquisitions, future product and service offerings, expected synergies, improved
revenue, EBITDA and EBITDA margins, and timing of closing, are forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. The words "believe," "expect,"
"intend," "estimate," "anticipate," "will," "guidance," "forecast," "outlook"
and similar expressions identify some, but not all, of these forward-looking
statements. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially, including, but
not limited to, the satisfaction of certain conditions to closing of the
proposed merger, including the risk that stockholder approval might not be
obtained in a timely manner or at all, the ability to successfully integrate the
two companies and achieve expected synergies following the merger, the ability
of the combined company to successfully acquire, integrate and operate
veterinary hospitals and clinics, requirements or changes affecting the
businesses in which XLNT is engaged, veterinary services trends, including
factors affecting supply and demand, dependence on acquisitions for growth,
labor and personnel relations, changing interpretations of generally accepted
accounting principles and other risks detailed from time to time in the SEC
reports of Echo, including its prospectus filed with the SEC on March 17, 2006.
These forward-looking statements speak only as of the date hereof. Echo
disclaims any intention or obligation to update or revise any forward-looking
statements.