CloudMD Closes Acquisition of Medical Confidence Inc., a Revolutionary, Technology-based, Healthcare Navigation Platform for ...
January 15 2021 - 4:04PM
CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF,
Frankfurt: 6PH) (the “
Company” or
“
CloudMD”), a telehealth company seeking to
revolutionize the delivery of healthcare to patients, is pleased to
announce that it has closed the previously announced acquisition of
Medical Confidence Inc. (“
Medical Confidence”), a
revolutionary healthcare navigation platform with proven results in
wait time reduction and patient satisfaction.
Medical Confidence provides access to a
proprietary, real time digital database of publicly available
specialists and their wait times, allowing patient referrals to the
right specialist in the shortest available time. The platform
provides medical consultations, wellness plans and referrals to
Canadian healthcare providers in support of patients’ mental and
physical health issues. The company’s clinical healthcare
navigators use a collaborative, team-based, approach that leaves
individuals motivated and supported throughout their care journey,
as well as eliminates frustrations and mental health issues
surrounding lack of access to care and long wait times to see
appropriate care.
Medical Confidence’s solutions are utilized by a
wide range of customers including employers, individuals,
disability case managers, life and health insurers and property and
casualty insurers. Proven results include a 20%
reduction in benefit and disability costs, 6-month
reduction in disability duration (on average), access to
treatment 220 days sooner (on average), and
improved employee satisfaction (reported by 75% of clients).
Currently, Medical Confidence has long standing contracts with
Canada’s largest group benefit and disability insurers.
The integration of Medical Confidence into
CloudMD’s platform of Enterprise Solutions will enable employers
and insurers to realize lower absenteeism and improved return to
work outcomes with personalized health and wellness care plans and
improved access to healthcare resources. The combined forces of
CloudMD, Snapclarity, HumanaCare, iMD and Medical Confidence
changes the landscape where employers can offer one solution that
addresses the health needs of their workforce and eliminates the
need of multiple vendors. Employers will be able to offer their
employees a group benefit plan that will not only provide access to
care for mental and physical health issues but improve the
financial costs associated with the current $7.5 billion dollars
spent on long term disability.
The acquisition is immediately accretive to
CloudMD as Medical Confidence generated approximately $2 million in
revenues with earnings before interest, taxes, depreciation and
amortization (EBITDA) margins exceeding 26% over the last fiscal
year ending March 2020. Medical Confidence drives revenue through
retainer-based, multi-year contracts with enterprise clients, and
has experienced year over year revenue growth exceeding 35% in last
fiscal year. CloudMD intends to integrate Medical Confidence into
its suite of products to realize and optimize revenue synergies and
cross selling opportunities.
Terms of Acquisition
In consideration for the purchase of 100% of the
outstanding securities of Medical Confidence, CloudMD has agreed to
pay shareholders aggregate consideration of $6 million payable as
follows: (i) $2.25 million in cash, subject to a working capital
adjustment; (ii) $2.25 million in shares of the company; and (iii)
a performance-based earnout of $1.5 million, which is payable 50%
in shares of the company and 50% in cash in equal annual issuances
over a period of two years. All shares issued pursuant to the
acquisition are issued at a deemed price of $2.625 per share 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 (press release dated Oct 22, 2020). The
shares will be subject to certain contractual restrictions on
trading for a period of 20 months from the date of issuance.
About CloudMD Software &
Services
CloudMD is digitizing the delivery of healthcare
by providing a patient centric approach, with an emphasis on
continuity of care. The Company offers SAAS based health technology
solutions to healthcare providers across North America and has
developed proprietary technology that delivers quality healthcare
through a holistic offering including hybrid primary care
clinics, specialist care, telemedicine, mental health support,
educational resources and artificial intelligence (AI). CloudMD
currently services a combined ecosystem of over 500
clinics, almost 4000 licensed practitioners and 8 million patient
charts across North America.
About Medical Confidence
Medical Confidence is a pioneer healthcare
navigation platform that reduces healthcare costs through achieving
better health outcomes. Its health outcomes are measurable and
demonstrate reductions in costs associated with absenteeism and
presenteeism. Medical Confidence clients report that its services
have reduced their absence costs by 20%. Leveraging its innovative
use of technology and unmatched national network of over 50,000
physician specialists. The healthcare consumer (employee) has
efficient and faster access to the ideal healthcare providers for
their medical condition. For more information on Medical
Confidence, visit www.medicalconfidence.com.
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.
Non-GAAP and Non-IFRS Measures
This press release refers to “EBITDA” and
“EBITDA margins” which are non-GAAP and non-IFRS financial measures
that do not have a standardized meaning prescribed by GAAP or IFRS.
The Company’s presentation of these financial measures may not be
comparable to similarly titled measures used by other companies.
These financial measures are intended to provide additional
information to investors concerning the Company’s and Medical
Confidence’s performance. EBITDA is defined as earnings before
interest, taxes, depreciation and amortization and EBITDA margins
is defined as EBITDA as a percent of total revenue. EBITDA and
EBITDA margins are Non-IFRS measures the Company uses as an
indicator of financial health and excludes several items which may
be useful in the consideration of the financial condition of the
Company and Medical Confidence, as applicable, including interest
expense, income taxes, depreciation, and amortization.
The TSX Venture Exchange does not accept
responsibility for the adequacy or accuracy of this release.
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