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 its members, is pleased
to announce that it has signed a binding term sheet (“
Term
Sheet”) to acquire 100% of Aspiria Corp.,
(“
Aspiria”), an integrated, Employee (EAP) and
Student Assistance Services (SAP) company, which focuses on a
comprehensive suite of mental health and wellness solutions for all
employer and educational sectors. Aspiria currently serves over 750
organizations, with 1 million employees, students, and their
families, in Canada and internationally.
Aspiria provides a technology-driven mental
health support solution that gives access to clinical services for
mental and situational life issues impacting wellbeing. CloudMD
will leverage Aspiria’s technology and digital care solutions
combined with the traditional in-person counselling to meet the
unique needs of students and employees across North America.
Aspiria offers its members flexibility of access to connect via
telephone, email and on-demand digital platforms that provides
online mental health resources, Internet-based cognitive
behavioural therapy (iCBT), cancer support, and a network of
professional therapists. Currently, the program is used by
employers, individuals, insurers and the student education market,
effectively blending intervention with technology and the human
touch, supporting a variety of mental health issues. This is
accomplished through a suite of digital tools combined with a
traditional short-term counselling model designed by clinicians and
grounded in evidence-based practices that are proven to positively
impact outcomes.
Aspiria will become part of CloudMD’s Enterprise
Health Solutions Division and is immediately synergistic with a
number of healthcare solutions in the division. Aspiria will
complement CloudMD’s other mental health solutions including
Snapclarity and HumanaCare to promote effective and efficient
clinical best practices in managing mild, moderate and chronic
conditions. Aspiria has an already established target market of
students, which creates an opportunity to provide other solutions
to this important demographic. Aspiria will be vertically
integrated to increase distribution channels and increase
demographic coverage within the division. The addition of Aspiria
increases CloudMD’s clinical network to approximately 7,500
therapists and mental health professionals in North America.
Aspiria's current annualized revenue run rate(2)
is approximately $3.4 million. It is expected that Aspiria will
generate an EBITDA (earnings before interest, taxes, depreciation
and amortization) margin greater than 20% with non-speculative post
acquisition synergies. CloudMD continues to expand its’ footprint
into specialised segments, like Student Assistance Programs, and
continues to scale its operations. Upon closing, the acquisition of
Aspiria will be immediately accretive to CloudMD with synergies the
company believes will drive further revenue and increased EBITDA
margins throughout its Enterprise Health Service division.
Karen Adams, Global Head, Enterprise
Health Solutions Division commented, “Corporate leaders
are tasked with ensuring companies have appropriate services to
support individuals during these unprecedented times of isolation,
constant changes to balancing work and elder/child care, financial
concerns, fear and anxiety. There is an increasing need to
carefully choose mental health solutions to be assured that
individuals have access to the treatment that will lead to
recovery. This acquisition will enable employers to rely on CloudMD
to assess mental health issues and depend on the healthcare team to
ensure the appropriate treatment plan. This will optimize
enterprise spend, increase member satisfaction while addressing
inclusion and diversity for mental health. ”
Charles Benayon, Founder & CEO of
Aspiria commented, “Becoming part of the CloudMD family
means we can do even more to inspire and motivate organizations on
their journey to better health. This is just the beginning because
we’ll be able to change the landscape of how mental health
solutions are provided to students, employers, and individuals, by
innovating faster, providing more choices, and providing continuity
of care to support shifting organizational health and wellness
needs. On our own, we pushed the bounds of what was possible from
the ground up by providing 24/7, multilingual, short-term mental
health services. With access to CloudMD’s incredible resources,
knowledge and global platform, the transformation of delivering
mental health care to organizations in the employer and student
markets will be truly limitless. We look forward to working with
the extended CloudMD team in contributing to their pioneering
approach in managing the wellbeing of organizations and its
members.”
Terms of Acquisition
In consideration for the purchase of 100% of the
outstanding securities of Aspiria, CloudMD has agreed to pay
shareholders of Aspiria aggregate consideration of $3 million
payable as follows: (i) $1.2 million in cash, subject to a working
capital adjustment; (ii) $1.05 million in common shares of the
Company; and (iii) a performance-based earnout of $0.75 million,
which is payable in common shares of the Company after a period of
1 year. All common shares issued pursuant to the acquisition will
be issued at a deemed price of $2.28 per common share and are
priced by calculating the 10-day volume-weighted average trading
price of the Company's common shares for the 10 trading days prior
to the execution of the binding term sheet. The common shares will
be subject to certain contractual restrictions on trading for a
period of 30 months from the date of issuance. The acquisition is
subject to customary closing conditions, including the execution of
a definitive acquisition agreement and receipt of TSX Venture
Exchange approval.
(1)
https://www.uottawa.ca/wellness/about/awareness
(2) Annual revenue run rate figures are
calculated based on annualizing the available results for the
11-month period ending November 30, 2020.
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 Aspiria
Corp.
Established in 2003, Aspiria Corp. is a 100%
Canadian-owned mental health solution-based company, that provides
Employee and Student Assistance Services to over
750 organizations in the employer and education sectors. Servicing
over 1 million employees, students, and families, Aspiria is known
for its quality services, excellent customer service, and high
value it provides to its clients.
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, including statements regarding projected revenue,
completion of the Aspiria acquisition, future business synergies
and cost savings. Such forward-looking statements are based on
CloudMD’s expectations, estimates and projections regarding its
business and the economic environment in which it operates,
including the expectations regarding closing of the Asipira
acquisition and the ability of the Company to carry out its
business plans. 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, including revenue projections, 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 Aspiria’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
Aspiria, 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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