HealthTech

CloudMD enters into a definitive agreement with WELL Health

CloudMD Software & Services Inc. (TSXV: DOC, OTCQX: DOCRF, Frankfurt: 6PH) (the “Company” or “CloudMD”), a healthcare technology and innovative health services company transforming the delivery of care, is pleased to announce that it has entered into a definitive agreement with Well Health Technologies Corp. (TSX:WELL, OTCQX: WHTCF) (“WELL”) for the sale of its British Columbia based primary care clinics and Cloud Practice, its cloud-based electronic medical records (“EMR”) and practice management software, for approximately $5.75 million in cash (the “Transaction”).

In connection with the Transaction, CloudMD has agreed to sell to WELL its brick-and-mortar primary care clinics, HealthVue (Richmond) and South Surrey Medical (Surrey), as well as its Cloud Practice software, which includes Juno EMR and ClinicAid. CloudMD will retain ownership of its online patient portal, MyHealthAccess, and will retain the right (under a licence granted by WELL at closing of the Transaction) to use Juno EMR, which have both been integrated into its Kii Personalized & Connected Care offering. The divestitures of the clinics and Cloud Practice will not affect the services CloudMD currently delivers within its core business and is not expected to have a material impact on the Company’s EBITDA or operating cash flows.

The Company’s divestment of the Clinics and Pharmacies Division is part of the Company’s previously announced overall plan to focus on the performance of its core businesses, Enterprise Health Solutions (“EHS”) and Digital Health Solutions (“DHS”). Divesting these non-core assets will provide additional near-term capital to support the continued growth and innovation of the Company’s employer healthcare offering and allow the Company to focus on improving gross margins and driving profitability.

Karen Adams, CEO of CloudMD commented, “We are executing against our strategy of divesting non-core assets and focusing on our core business to drive organic growth, improve margins and move towards profitability next year. We will continue to reallocate capital from the sale of non-core assets back into the organic growth of the Company and ensure we maximize the potential of our faster growing and higher margin EHS division.”

Transaction Details

The consideration to be paid by WELL in connection with the Transaction is $5.75 million, with $5.1 million being paid in cash at closing and the balance being subject to a holdback. Subject to satisfying the closing conditions, closing of the Transaction is expected in Q4 2022.

INFOR Financial Inc. acted as exclusive financial advisor and Cassels Brock & Blackwell LLP acted as legal advisor to CloudMD.

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