The total consideration for the acquisition of the two healthcare technology companies is approximately $28 million, consisting of: (i) $17.9 million paid in cash from the proceeds of the Financing; (ii) $3.9 million paid in WELLSTAR subordinate voting shares; and (iii) $6.2 million paid in deferred consideration including anniversary payments and a multi-year earn-out. Collectively, the two acquisitions contributed approximately $15 million in annual revenues on a trailing 12-month basis with EBITDA margins(1) of approximately 20%. Both companies were acquired at accretive purchase prices inclusive of earn-outs. One of the two tuck-ins is a control acquisition of 51% of a leading nationwide healthcare technology services company, while the other (a Canadian based regional EMR) is a full 100% acquisition. The Company has a call option to acquire the balance of the technology services company within 5 years post-closing for a defined purchase price.
As part of the Financing, WELLSTAR entered into various governance agreements with the Financing investors, including a shareholders agreement and a governance agreement, to grant standard investor rights to certain classes of shareholders until WELLSTAR ceases to be a private company.
WELL did not issue any shares as part of this transaction. All equity issuances discussed in this release relate to its WELLSTAR subsidiary.
Cormark Securities, Beacon Securities and Eight Capital acted as co-lead agents on behalf of a syndicate of agents with respect to the Financing, with Cormark Securities serving as the sole bookrunner.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available."
WELL HEALTH TECHNOLOGIES CORP.
Per: "Hamed Shahbazi"
Hamed Shahbazi
Chief Executive Officer, Chair and Director
About WELL Health Technologies Corp.
WELL's mission is to tech-enable healthcare providers. We do this by developing the best technologies, services, and support available, which ensures healthcare providers are empowered to positively impact patient outcomes. WELL's comprehensive healthcare and digital platform includes extensive front and back-office management software applications that help physicians run and secure their practices. WELL's solutions enable more than 38,000 healthcare providers between the US and Canada and power the largest owned and operated healthcare ecosystem in Canada with over 200 clinics supporting primary care, specialized care, and diagnostic services. In the United States WELL's solutions are focused on specialized markets such as the gastrointestinal market, women's health, primary care, and mental health. WELL is publicly traded on the Toronto Stock Exchange under the symbol "WELL" and on the OTC Exchange under the symbol "WHTCF". To learn more about WELL, please visit: www.well.company.
Forward-Looking Statements
This news release contains "Forward-Looking Information" within the meaning of applicable Canadian securities laws, including, without limitation: information regarding the WELL's and WELLSTAR's goals, the intention to consummate a public listing by the end of 2025, the expectation of generating certain revenue, gross margins and EBITDA margins as set out herein, the expectation that WELLSTAR will continue as a 'Rule of 40'+ company, the anticipation that WELLSTAR will continue to be a high-growth healthcare technology company with strong expansion prospects, the plan to continue to be active in M&A and its ability to consummate on these opportunities, the belief that the reorganization will enable WELL to better support its clinical operations, the expectation that WELL will maintain a significant majority in the economic and voting interest of WELLSTAR, and that the reorganization will accelerate growth and drive higher margins for WELL on a consolidated basis. Forward-Looking Information is 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. Forward-Looking Information generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe", "goal" or "continue", or the negative thereof or similar variations. Forward-Looking Information involves 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 the Forward-Looking Information and the Forward-Looking Information is not a guarantee of future results or performance. WELL's comments expressed or implied by such Forward-Looking Information 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 information. Forward-Looking Information are qualified in their entirety by inherent risks and uncertainties, including: that capital markets decline to a point whereby an exit strategy is not feasible on economically favorable terms; WELLSTAR is unable to fund future growth; WELLSTAR is unable to negotiate and consummate future M&A acquisitions on favorable terms; direct and indirect material adverse effects from adverse market conditions; risks inherent in the primary healthcare sector in general; regulatory and legislative changes; litigation risk; that future results may vary from historical results; an inability to realize the expected benefits and synergies of acquisitions; that market competition may affect the business, results and financial condition of WELL and other risk factors identified in documents filed by WELL under its profile at www.sedarplus.ca, including its most recent Annual Information Form and its most recent Management, Discussion and Analysis. Except as required by securities law, WELL does not assume any obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise.
This news release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about WELLSTAR's expected increase in revenue, EBITDA(1) , and EBITDA margin(1) on a post-closing basis, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above paragraphs. The actual financial results of WELLSTAR on a post-closing basis may vary from the amounts set out herein and such variation may be material. WELL and WELLSTAR and its respective management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, WELL undertakes no obligation to update such FOFI. FOFI contained in this news release was made as of the date hereof and was provided for the purpose of providing further information about WELL and WELLSTAR's anticipated future business operations on a post-closing basis. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.
Footnotes:
1. Earnings before interest, taxes, depreciation and amortization ("EBITDA")
and EBITDA margin (EBITDA divided by revenue) are each Non-GAAP measures.
EBITDA and EBITDA margin should not be construed as alternatives to net
income/loss determined in accordance with International Financial
Reporting Standards ("IFRS"). EBITDA does not have any standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers. The Company believes that 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. For EBITDA reconciliation to Net income, please refer
to the Company's most recent Management Discussion and Analysis on
sedarplus.ca. EBITDA margin is EBITDA as a percentage of total revenue.
2. One of the two tuck-ins noted herein was a control acquisition of 51% and
not a full acquisition. The company has a call option to acquire the
balance of the company within 5 years.
SOURCE WELL Health Technologies Corp.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/December2024/12/c1390.html
/CONTACT:
For more information: Tyler Baba, Investor Relations Manager, investor@well.company, 604-628-7266
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(END) Dow Jones Newswires
December 12, 2024 07:01 ET (12:01 GMT)
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