Benzinga | Jan 24, 2022 04:56AM EST

Digital Ally's Healthcare Unit Announced Acquisition of Billing Company for $2.1M

Digital Ally, Inc. (NASDAQ:DGLY) (the "Company"), today announced that its new healthcare subsidiary, Nobility Healthcare, LLC, has acquired a third billing company with an annual revenue run rate of approximately $3.5 million. This closely-held company was founded several years ago and provides revenue cycle management (RCM) and other services for over 180 dental practices located throughout the United States. This acquisition represents a new vertical for Nobility Healthcare because the target's focuses on providing insurance claim reimbursement billing, verification, and related services to dentists and dental practices rather than medical providers, as is the case with the Nobility Healthcare's previous acquisitions. This latest purchase gives Nobility Healthcare an anticipated annual revenue run-rate of approximately $7.5 million.

The purchase price was $2,100,000 with approximately 64% paid in cash at the closing and the balance through an earn-out promissory note bearing interest at 3% annually payable over 37 months. The earnout note is subject to adjustment based on future revenues and client retention of the acquired company.

"We are excited with the rapid progress of our new healthcare subsidiary, which is already producing positive cash flow. It continues to implement a roll up strategy by targeting the acquisition of accretive privately owned RCM companies. As we explained in June, we capitalized the subsidiary with $13.5 million to make strategic acquisitions of privately held RCM companies that will provide recurring revenues and consistent profits. Nobility Healthcare has used a portion of these funds to make the cash payments required in its first three acquisitions, as well as to provide working capital. This latest purchase is an established company with a stable, diverse and growing client portfolio and establishes a new vertical in the dental practice arena. Consistent with our business plan, we expect to provide superior RCM services for maximum client retention after completion of the acquisition while we implement cost reductions and economies of scale to expand profit margins with the RCM company's integration into our healthcare subsidiary," stated Stan Ross, CEO of Digital Ally.