CloudMD Announces Divestment of Primary Care Clinics and Cloud Practice to WELL Health
Vancouver, BC, October 11, 2022 – 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.”
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.
About CloudMD Software & Services
CloudMD is transforming the delivery of healthcare using technology and by providing a patient-centric approach, with an emphasis on continuity of care. By leveraging healthcare technology, the Company is building one, connected platform that addresses all points of a patient’s healthcare journey and provides better access to care and improved outcomes. Through CloudMD’s proprietary technology, the Company delivers quality healthcare through a holistic offering including hybrid primary care clinics, specialist care, telemedicine, mental health support, healthcare navigation, educational resources, and artificial intelligence (AI). CloudMD’s business is separated into three main divisions: Clinics and Pharmacies, Digital Solution and Enterprise Health Solutions, the Company’s fastest growing division. CloudMD’s Enterprise Health Solutions Division has built a leading employer healthcare solutions, including its Comprehensive Integrated Health Services Platform, which offers one comprehensive, digitally connected platform for educational institutions, corporations, insurers, and advisors to better manage the health and wellness of their students, employees, and customers.
CloudMD currently services a direct ecosystem of over 5,700 clinicians including, 1,800+ mental health practitioners, 1,600+ allied health professionals, 1,400+ doctors and nurses and covers 12 million individual lives across North America. For more information visit: https://investors.cloudmd.ca.
ON BEHALF OF THE BOARD OF DIRECTORS
Chief Executive Officer
FOR ADDITIONAL INFORMATION, CONTACT:
VP, Investor Relations
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
This news release contains “forward-looking statements” and “forward-looking information” within the meaning of Canadian securities laws, including statements about the Company’s growth strategy and statements regarding the Transaction, including the expected timing of closing. These statements are based upon information currently available to CloudMD’s management. All information that is not clearly historical in nature may constitute forward‐looking statements. In some cases, forward‐looking statements may be identified by the use of terms such as “forecast”, “assumption” and other similar expressions or future or conditional terms such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and “should”. Forward-looking statements contained in this news release are based on certain factors and assumptions made by management of CloudMD based on their current expectations, estimates, projections, assumptions and beliefs regarding their business and CloudMD does not provide any assurance that actual results will meet management’s expectations. While management considers these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect. Such forward‐looking statements are not guarantees of future events or performance and by their nature involve known and unknown risks, uncertainties and other factors, including those risks described in the Company’s MD&A (which is filed under the Company’s issuer profile on SEDAR and can be accessed at www.sedar.com), that may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward‐looking statements. Although CloudMD has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward‐looking statements, other factors may cause actions, events or results to be different than anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such forward‐looking statements. Accordingly, readers should not place undue reliance on forward‐looking information. CloudMD does not undertake to update any forward-looking information, whether as a result of new information or future events or otherwise, except as may be required by applicable securities laws.