- Acquisition will significantly expand WELL's digital health
portfolio to providing Electronic Medical Records ("EMR")
services in Ontario.
- KAI provides SaaS (Software as a Service) based EMR services
to approximately 560 clinics in Ontario, supporting approximately 2,100
registered doctors and practitioners, over 10.0M patients1 and approximately a
quarter of a billion dollars in billings per year.
- With the proposed acquisition of KAI and last week's
announcement of WELL's acquisition of OSCARPrn, WELL will increase
its EMR services and support footprint to approximately 852 clinics
across Canada.
- Upon closing, this acquisition will boost WELL's recurring
SaaS revenue and be immediately accretive to earnings.
- KAI's award winning founders and team led by Arjun Kumar and Sara
Bond will continue in their roles with KAI and join WELL's
Technology management team on closing.
- WELL plans to finance this acquisition through cash on hand
and a bought deal private placement led by GMP Securities.
VANCOUVER, May 30, 2019 /CNW/ - WELL Health Technologies
Corp. (TSX.V: WELL) (the "Company" or "WELL"), a
company focused on consolidating and modernizing clinical and
digital assets within the primary healthcare sector, is pleased to
announce it has entered into an arm's length share purchase
agreement dated May 30, 2019 with the
shareholders of Kela Atlantic Inc. dba KAI Innovations
("KAI"), whereby the Company has agreed to acquire all of
the issued and outstanding shares of KAI (the
"Transaction").
The total consideration payable by WELL in connection with the
acquisition of KAI is approximately $10,750,000 consisting of the following: (i)
$6,000,000 paid in cash upon
closing of the Transaction; (ii) $2,000,000 paid in the capital of WELL
shares at a price of approximately $0.705 per share; and (iii) cash payments of
$2,750,000 to be paid in the first
year after closing. In addition, WELL will pay a conditional
earn-out based on overall operating performance of up to
$7.0M. The Transaction is
expected to be financed with a combination of cash on hand and the
private placement financing announced concurrently on May 30, 2019.
"This is a major event for us and the industry and to our
knowledge positions WELL as the third largest EMR services vendor
in the Canada. We couldn't be more thrilled to have Arjun,
Sara and the whole KAI team join the WELL family and drive WELL's
rapidly expanding OSCAR EMR
portfolio," said Hamed Shahbazi,
Chairman and CEO of WELL Health Technologies. "KAI has a solid
history of leading innovation while supporting the OSCAR
community.
KAI, the recipient of Canadian Business Magazine's 2015 Startup
of the Year, has the third largest EMR user base in Ontario and is the largest provider of
OSCAR EMR services to healthcare
clinics in the country, including the founding OSCAR clinic at
McMaster University Department of
Family Medicine. OSCAR, an acronym for "Open Source Clinical
Application Resource", is a leading open-source based EMR software.
KAI provides OSCAR EMR services to
approximately 560 medical clinics, supporting over 2,100 registered
practitioners, and over 10M
patients1 in Ontario.
KAI generated approximately $3.5M of revenues over the past 12 months (most
of which is recurring SaaS revenues) and is expected to be
immediately accretive to WELL's earnings upon closing given that
KAI's Adjusted EBITDA2 operating margins are better than
30%. In addition, KAI has developed a strong IP portfolio, which
includes a host of patient engagement applications such as online
booking system, self-service check-in and other applications. Upon
closing, Arjun Kumar, KAI's CEO,
will become WELL's Chief Information Officer, while KAI's COO,
Sara Bond, will join WELL's
management team as the Senior Vice President of Product
Development.
"The opportunity to join forces with such a phenomenal team with
a proven track record at WELL is a perfect fit for our Company,"
said Arjun Kumar, CEO of KAI.
"Together we will have a strong presence in the Canadian healthcare
system".
OSCAR EMR was created by the
McMaster University Department of
Family Medicine to inspire collaboration between the wide spectrum
of health professionals with the goal to drive downstream benefits
to patient care.
In addition to customary closing conditions, the transaction is
subject to approval from the TSX Venture Exchange (the "TSXV"). The
Transaction is expected to constitute an Expedited Acquisition in
accordance with Policy 5.3 of the TSXV. All shares issued in
the transaction will be subject to a restricted period of four
months and one day. There are no finder's fees payable in
connection with the Transaction.
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1.
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Patient count is
based on total number of patient profiles and does not exclude
duplicate patient records, inactive or deceased
patients.
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2.
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Adjusted EBITDA is
Non-GAAP measure. Earnings before interest, taxes,
depreciation and amortization ("EBITDA") and Adjusted EBITDA should
not be construed as alternatives to net income/loss determined in
accordance with IFRS. EBITDA and Adjusted EBITDA do not have
any standardized meaning under IFRS and therefore may not be
comparable to similar measures presented by other issuers. In
this case, Adjusted EBITDA is defined as EBITDA less commissions
paid on acquisition, dividend and intellectual property payment
made to previous shareholders, and discontinued costs. The
Company believes that Adjusted EBITDA is a meaningful financial
metric as it measures cash generated from operations which the
Company can use to fund working capital requirements, service
future interest and principal debt repayments and fund future
growth initiatives.
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WELL HEALTH TECHNOLOGIES CORP.
Per:
"Hamed
Shahbazi"
Hamed Shahbazi
Chief Executive Officer, Chairman and Director
About WELL
WELL is a unique company that operates Primary Healthcare
Facilities as well as a significant EMR or Electronic Medical
Records business that supports the digitization of such
clinics. WELL's overarching objective is to empower doctors
to provide the best and most advanced care possible leveraging the
latest trends in digital health. In the last 12 months, WELL
physicians served approximately 600,000 patient visits through its
network of 19 medical clinics. WELL is publicly traded on the
TSX Venture Exchange under the symbol WELL.V. WELL was
recognized as a TSX Venture 50 Company in 2018 and 2019.
Forward-Looking Statements
This news release may contain "forward-looking statements"
within the meaning of applicable Canadian securities laws,
including, without limitation: the closing of the Transaction; the
Company obtaining all consents and TSXV approval in order to close;
the anticipated number of clinics, practitioners, and patients of
WELL post-closing; the impact on SaaS revenue, earnings and
operations of WELL; the belief that such acquisition will position
WELL as one of the leading OSCAR providers in Canada; financing the acquisition and that Mr.
Kumar and Ms. Bond will continue in their roles with KAI and join
WELL's technology management team on closing. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are
inherently subject to significant business, economic and
competitive uncertainties, and contingencies. These statements
generally can be identified by the use of forward-looking words
such as "may", "should", "will", "could", "intend", "estimate",
"plan", "anticipate", "expect", "believe" or "continue", or the
negative thereof or similar variations. Forward-looking statements
involve known and unknown risks, uncertainties and other factors
that may cause future results, performance or achievements to be
materially different from the estimated future results, performance
or achievements expressed or implied by those forward-looking
statements and the forward-looking statements are not guarantees of
future performance. WELL's statements expressed or implied by these
forward-looking statements are subject to a number of risks,
uncertainties, and conditions, many of which are outside of WELL 's
control, and undue reliance should not be placed on such
statements. Forward-looking statements are qualified in their
entirety by the inherent risks and uncertainties surrounding the
Transaction, including: that WELL's assumptions in making
forward-looking statements may prove to be incorrect; adverse
market conditions; risks inherent in the primary healthcare sector
in general; the inability of WELL to complete the Transaction and
related transactions at all or on the terms announced; the TSXV not
approving the Transaction; risks relating to the satisfaction of
the conditions to closing the Transaction; that future results may
vary from historical results; and that market competition may
affect the outcome of the Transaction and the business, results and
financial condition of WELL following the closing of the
Transaction. Except as required by securities law, WELL does not
assume any obligation to update or revise any forward-looking
statements, whether as a result of new information, events or
otherwise.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE WELL Health Technologies Corp.