CloudMD Signs Definitive Agreement to Acquire Majority Interest in West Mississauga Medical Clinic
Secures footprint in Ontario with cash flow positive clinic, revenue of C$1.8 million in 2019
Vancouver, BC, August 13, 2020 - CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF, Frankfurt: 6PH) (the “Company” or “CloudMD”), a telemedicine company revolutionizing the delivery of healthcare to patients, announces today that is has entered into a Share Purchase Agreement to acquire a majority interest West Mississauga Medical Ltd. (“West Mississauga Medical”), a comprehensive family medicine and specialist medical clinic with 8 family doctors and 4 specialists serving over 100,000 patients. As previously announced, on June 16, 2020, the Company entered into a binding term sheet with West Mississauga Medical to acquire 51% of the business, assets and operations.
West Mississauga Medical is a well-established medical clinic that has served its community for over 16 years and remained open throughout the COVID-19 pandemic seeing patients via telemedicine and in-person. The clinic will be integrated into the CloudMD EMR platform and its network of doctors and specialists will immediately start servicing CloudMD’s registered users and patients in Ontario.
The acquisition will be immediately accretive to CloudMD as West Mississauga Medical generated more than $1.8 million in revenues with earnings before interest, taxes, depreciation, and amortization (EBITDA) margins exceeding 11% over the last fiscal year ending December 2019.
The acquisition is part of CloudMD’s national growth strategy which includes having well established brick and mortar clinic partners in major provinces. These clinics ultimately provide a strong, centralized patient base and footprint across the country.
Terms of Agreement
In consideration for the purchase of 51% of the outstanding securities of West Mississauga Medical, CloudMD has agreed to pay Shareholders aggregate consideration of C$200,000 payable as up to C$140,000 in cash and C$60,000 in shares of the Company. All shares issued pursuant to the acquisition are issued at a deemed price of $0.81 per share and are priced by calculating the ten-day volume weighted trading price of the Company shares for the 10 trading days prior to the execution of the definitive agreement.
The acquisition is also considered to be a “related party transaction” as defined under Multilateral Instrument 61-101 (“MI 61- 101”). The transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101, as neither the fair market value of the securities being issued nor the consideration being paid exceeds 25% of the Issuer’s market capitalization.
The acquisition is subject to customary closing conditions, including receipt of TSX Venture Exchange approval.
About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare by providing patients access to all points of their care from their phone, tablet or desktop computer. The Company offers SAAS based health technology solutions to medical clinics across Canada and has developed proprietary technology that delivers quality healthcare through the combination of connected primary care clinics, telemedicine, and artificial intelligence (AI). CloudMD currently provides service to a combined ecosystem of 376 clinics, over 3000 licensed practitioners and almost 3 million patient charts across its servers.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD”
Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
CloudMD Software & Services Inc.
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.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.