CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF,
Frankfurt: 6PH) (the “
Company” or
“
CloudMD”), a telehealth company revolutionizing
the delivery of healthcare to patients, is excited to announce that
it has entered into a Binding Term Sheet (“
Term
Sheet”) to acquire the Canadian Medical Directory
(“
CMD”), Canada’s largest, most trusted, directory
of medical professionals including 91,000 practicing physicians and
10,000 residents and nurse practitioners across the country. The
robust, multi-layered database is genuinely unique as no other
direct competitor has a SaaS platform that collects and vends the
data in such a highly segmented, up-to-date way.
For 65 years, CMD has been trusted as the gold
standard for information and is considered the only reliable
resource for all provinces' medical professionals in a standard
national format. CMD is Canada’s leading source for profile and
contact information on practicing physicians — both general
practitioners and medical specialists— and nurse practitioners,
across the country. With up-to-date information, it’s a key
reference tool used by clinics, hospitals, medical placement firms,
pharmaceutical companies, and manufacturers and distributors of
medical equipment and supplies. CMD has very high brand recall and
recognition as a trusted source of information.
Having accurate information on every medical
practitioner across the country will be immediately valuable for
CloudMD to cross sell, and optimize its suite of products. CloudMD
will be able to integrate the CMD database into its Juno EMR,
billing, virtual care and telehealth platforms, as well as iMD
Health’s leading educational resource databank. This acquisition
will allow CloudMD to leverage the CMD brand, customer network and
data, to power up and accelerate doctor acquisition and adoption.
The acquisition will also enable CloudMD to use its suite of
products and resources to continue building and growing CMD’s
robust database.
With CloudMD’s significant network, there is
also an opportunity to broaden and expand CMD’s current enterprise
and institutional client base to drive further revenue. CloudMD
plans to do this by cross-selling key CMD offerings including CMD’s
API for Insurers, which helps with Medical Insurance fraud
detection, CMD’s pending integration with Salesforce, HubSpot and
MS Dynamics and CMD’s newest integration with Clinia.com, who has
integrated the CMD data into its next generation Canadian health
resource directory.
CMD is wholly-owned by Owen Media Partners, an
information services leader founded by CEO Hugh Owen. Through its
MacRAE'S and Scott's Directories brands, Owen Media has helped tens
of thousands of businesses with their B2B Lead Gen and digital
marketing strategies and attracted more than 500 million visitors
to its own websites. Founded in 1995, Owen Media has operations in
Toronto and Delhi, India and a sales network in Canada and the US.
The acquisition of CMD will be immediately
accretive to CloudMD’s top line with the 100% SaaS and high margin
revenue model. CMD generated approximately $450,000 in revenues
with earnings before interest, taxes, depreciation and amortization
(EBITDA) margins exceeding 65%, resulting in an EBITDA of
approximately $293,000 over the 12-month period ending September
30, 2020. The Company believes that there is significant
opportunity to further optimize the revenue through integration and
optimization.
Essam Hamza, CEO of CloudMD
commented, “This acquisition reflects another important piece of
our strategy to provide a whole-person, longitudinal approach to
healthcare delivery. Having CMD’s robust, segmented database of
health practitioners across Canada will be extremely valuable for
our business and opens up synergies and opportunities for
optimization, cross selling, public sector and private corporate
partnerships. Over the years, Hugh has continued to build an
incredible product, which combined with our platform, will be a
powerful tool to help Canadians and the overall healthcare sector.
Built by a team of doctors, we understand the pain points of the
healthcare sector, and having an accurate data rich database like
CMD will provide important data-sets that we can add to, which will
in turn provide better service and care to patients. We are
thrilled Hugh and the CMD team decided to partner with CloudMD, and
we look forward to working with them on integrating and expanding
our services.”
Hugh Owen, CEO of Owen
Media commented, “We are excited to work closely with
Essam and the entire CloudMD team. Pairing the Canadian Medical
Directory with CloudMD was a natural fit, placing one of Canada’s
most trusted medical brands into the heart of the telehealth
revolution. Using the directory, CloudMD will be able to bring its
own message to more doctors, clinics and hospitals as well as drive
growth into CMD’s traditional SaaS information business. We can’t
wait to get started!”
Terms of
Agreement
In consideration for the purchase of 100% of the
assets and business of CMD, CloudMD has agreed to pay aggregate
consideration of $1.95 million payable as follows: (i) $250,000 in
cash; (ii) $1.35 million in shares of the Company; and (iii) a
performance-based earnout of $350,000, which is payable in shares
of the Company in annual issuances over a period of two years. All
shares issued pursuant to the acquisition are issued at a deemed
price of $2.35 per share and are priced by calculating the 10-day
volume-weighted average trading price of the Company's shares for
the 10 trading days prior to the execution of the binding term
sheet. The shares will be subject to certain contractual
restrictions on trading for a period of 16 months from the date of
issuance.
The company also announces the granting of stock
options to purchase an aggregate of 400,000 common shares of the
Company at an exercise price of $2.40 per share for a five-year
term. The stock options were granted pursuant to the
Company’s Stock Option Plan and the policies of the TSX Venture
Exchange, to an officer of the Company.
About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare
by providing patients access to all points of their care from their
phone, tablet or desktop computer. The Company offers SAAS based
health technology solutions to medical clinics across Canada and
has developed proprietary technology that delivers quality
healthcare through the combination of connected primary care
clinics, telemedicine, and artificial intelligence (AI). CloudMD
currently provides service to a combined ecosystem of 376 clinics,
over 3000 licensed practitioners and almost 3 million patient
charts across its servers.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD" Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
Julia Becker VP, Investor
Relationsjulia@cloudmd.ca
Forward Looking Statements
This news release contains forward-looking
statements that are based on CloudMD’s expectations, estimates and
projections regarding its business and the economic environment in
which it operates, including with respect to its business plans and
its intended use of the proceeds of the Offering. Although CloudMD
believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and involve risks and
uncertainties that are difficult to control or predict. Therefore,
actual outcomes and results may differ materially from those
expressed in these forward-looking statements and readers should
not place undue reliance on such statements. These forward-looking
statements speak only as of the date on which they are made, and
CloudMD undertakes no obligation to update them publicly to reflect
new information or the occurrence of future events or
circumstances, unless otherwise required to do so by law.
The TSX Venture Exchange does not accept
responsibility for the adequacy or accuracy of this release.
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