- As of Q3 2021 and inclusive of recently completed
acquisitions1, WELL's Virtual Services line of
business2 had a run-rate revenue approaching
$110M with over 50% Adjusted gross
margins 3 and positive Adjusted EBITDA3.
Organic Growth for Virtual Services was greater than
50%4 in Q3 2021.
- On December 1, WELL completed a
100% tuck-in acquisition of CognisantMD whose Ocean platform
is the category leader in digital patient engagement technology and
eReferral software in Canada.
- As an existing Apps.Health partner, Ocean adds best-in-class
digital tools for patient engagement such as online booking, secure
messaging, appointment reminders, digital forms & check-in
kiosks, as well as provider network solutions including eReferral
and eConsult.
- CognisantMD currently generates $4.0M in in yearly SaaS revenues, 95% gross
margins, and has a history of generating 50%+ organic growth and
positive Adjusted EBITDA. The Ocean platform currently supports
approximately 8,000 physicians and delivers over 35,000 e-referrals
per month.
VANCOUVER, BC and
TORONTO, Dec. 2, 2021 /PRNewswire/ - WELL Health
Technologies Corp. (TSX: WELL) (the "Company"
or "WELL"), a company focused on positively impacting health
outcomes by leveraging technology to empower healthcare
practitioners and their patients globally, is pleased to provide
key updates on the company's Virtual Services business and announce
the 100% acquisition of CognisantMD and its Ocean Platform
("Ocean"), an integral part of clinical workflows for practitioners
across Canada.
Virtual Services Update:
WELL's Virtual Services encompasses all aspects of our
Practitioner enablement platform. This includes key services such
as Electronic Medical Records (EMR) software, Revenue Cycle
Management (RCM) and digitally oriented patient service businesses
such as Circle Medical, Tia Health & WISP. This also includes
WELL's digital app business unit, which hosts numerous physician
productivity tools & applications through our Apps.Health
ecosystem.
Hamed Shahbazi, Chairman and CEO
of WELL Health commented, "We are pleased to report WELL's virtual
services ecosystem continues to exhibit strong organic growth
across the organization with over 50% organic growth as measured on
a year over year basis4. As of Q3 2021 and inclusive of
our recently completed acquisitions1, our platform was
generating approximately $110M in
run-rate revenues with 50%+ Adjusted gross margins. We continue to
invest through our income statement to activate further organic
growth. We are also very pleased to be welcoming the CognisantMD
team to the WELL family. Their strong organic growth,
experienced healthcare IT brain trust and culture of ingenuity will
only add momentum to the success of our digital practitioner
enablement platform"
Acquisition of CognisantMD Creator of the Ocean
Platform
WELL is pleased to announce the acquisition of CognisantMD whose
Ocean platform includes a full suite of virtual patient engagement
tools, including online appointment booking, secure messaging,
appointment reminders, and digital forms as well as in-clinic
check-in kiosks and tablets. Each month, Canadians complete over
800,000 patient engagements with their healthcare providers using
Ocean's digital tools. Ocean has built unparalleled
interoperability, with integrations into over 18 EMRs, Electronic
Health Records (EHRs), and provincial healthcare assets and
third-party technology platforms using industry-leading open
standards including HL7 FHIR5.
Ocean's interoperability is highly strategic for government
initiatives, as evidenced by their platform powering eReferrals for
the province of Ontario's
eServices Program. Ocean's platform supports over 8,000 physicians,
and approximately 35,000 referrals and consults are sent
electronically through the platform monthly. Ocean's eReferral
system has resulted in reduced wait times, a 12% reduction in
unnecessary MRIs, and has a 97% patient satisfaction rate.
Ontario's reduced wait times,
improved patient outcomes, and cost efficiencies has attracted
attention from new provinces, with Ocean recently launching a Proof
of Concept for eConsult with the Nova Scotia Health Authority
(NSHA), with the aim to add further provinces in the future.
CognisantMD will operate as a stand-alone business within the
WELL Digital App Business Unit and will be operated by its current
President, Jeff Kavanagh and Medical
Director, Dr. Doug Kavanagh.
Ocean has established deep integrations and long-standing
partnerships with all the major EMR systems in Canada, including OSCAR Pro on apps.health.
Post transaction, CognisantMD will prioritize increasingly advanced
integrations with its ecosystem of reseller partners to market and
sell the integrated suite of Ocean solutions across Canada. Together, Ocean & WELL also plan
to build integrations into other EMR assets, including Intrahealth
& Cerebrum, creating a sizeable addressable market of new
physicians for Ocean's suite of services. In addition, WELL will
look to benefit from the suite of Ocean products across its
substantial clinical and specialty businesses.
Amir Javidan WELL's Chief Operating Officer commented, "WELL has
been impressed with CognisantMD and its leadership from the very
beginning of our journey together. Watching CognisantMD develop
from an app partner to the progression of joining the WELL family
as a tuck-in acquisition shows the power of WELL's platform and
industry connectivity. With Ocean now powering the Provider Network
platform of two provinces, we believe they are well positioned as
the category leader for eReferral and eConsult purposes across
Canada. A suite of best-in-class
engagement tools and eReferral connectivity from primary to
specialty and acute care are key areas of focus for our
practitioner enablement platform, and we are excited to get
CognisantMD further integrated into the WELL ecosystem in the
coming months."
Dr. Doug Kavanagh, Medical
Director of CognisantMD also commented, "Over the past few years,
clinicians across Canada have
embraced the Ocean Platform as an integral part of clinical
workflows from their EMR. We're excited to join forces with WELL as
we continue to pursue our shared goal of improving outcomes for
patients by providing clinicians with technology that helps to
improve the efficiency, reliability, and accuracy of healthcare
records."
"We look forward to being a part of the larger WELL Health
ecosystem, allowing us to leverage the management, capital
allocation and shared services expertise of WELL while continuing
to expand and serve patients and providers, who are universally
demanding better health data interoperability," commented
Jeff Kavanagh, CEO, CognisantMD.
"With the resources of the WELL organization, we see huge potential
for the Ocean platform not just in Canada but outside as well; really we're just
getting started."
Transaction Details
The consideration paid by WELL in connection with the
acquisition of CoginsantMD was approximately $10,570,000, in
cash at closing. In addition, WELL will pay $7,000,000 in time-based payments, as well as a
conditional earn-out based on overall operating performance of up
to approximately $7,000,000. The consideration is subject to
standard closing adjustments and a working capital holdback. Full
achievement of the performance based earnout would imply an
acquisition multiple of less than 5X future EBITDA.
Footnotes:
- The figures noted in this sentence include the acquisitions of
WISP and AwareMD but not CognisantMD within the Virtual Services
line of business
- Virtual Services includes all SaaS, services or product
revenues associated with the Company's practitioner enablement
platform that is billed to companies or practitioners outside of
WELL's patient service businesses including any patient services
business that has little to no reliance on physical brick and
mortar clinics (such as Tia Health, VirtualClinic+, WISP and Circle
Medical). This group of revenue does not include WELL's
omni-channel patient services businesses which include a
combination of virtual and/or brick and mortar operations (such as
WELL's primary clinic network, CRH Medical, and MyHealth).
- Non-GAAP measure. Adjusted gross profit and
adjusted gross margin do not have any standardized meaning under
IFRS and therefore may not be comparable to similar measures
presented by other issuers. The Company defines adjusted
gross profit as revenue less cost of sales (excluding depreciation
and amortization) and adjusted gross margin as adjusted gross
profit as a percentage of revenue. Adjusted gross profit and
adjusted gross margin should not be construed as an alternative for
revenue or net loss determined in accordance with IFRS. The
Company believes that adjusted gross profit and adjusted gross
margin are meaningful metrics in assessing the Company's financial
performance and operational efficiency.
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. The Company
defines Adjusted EBITDA as EBITDA (i) less net
rent expense on premise leases considered to be finance leases
under IFRS and (ii) before transaction, restructuring, and
integration costs, time-based earn-out expense, change in fair
value of investments, share of loss of associates, foreign exchange
gain/loss, and stock-based compensation expense. The Company
considers Adjusted EBITDA a financial metric that measures cash
that the Company can use to fund working capital requirements,
service future interest and principal debt repayments and fund
future growth initiatives.
- The 50% growth figure includes all assets that were owned in
the WELL family within the virtual services group as of
Oct 1, 2021 (the day after our
Q3)
- HL7 FHIR means Fast Healthcare Interoperability Resources which
is a standard describing data formats and elements and an
application programming interface for exchanging electronic health
records. The standard was created by the Health Level Seven
International health-care standards organization.
WELL HEALTH TECHNOLOGIES CORP.
Per: "Hamed
Shahbazi"
Hamed Shahbazi
Chief Executive Officer, Chairman and Director
About WELL Health Technologies Corp.
WELL is a technology enabled healthcare company whose
overarching objective is to positively impact health outcomes to
empower and support healthcare practitioners and their
patients. WELL has built an innovative practitioner
enablement platform that includes comprehensive end to end practice
management tools inclusive of virtual care and digital patient
engagement capabilities as well as Electronic Medical Records
(EMR), Revenue Cycle Management (RCM) and data protection
services. WELL uses this platform to power healthcare
practitioners both inside and outside of WELL's own omni-channel
patient services offerings. WELL owns and operates
Canada's largest network of
outpatient medical clinics serving primary and specialized
healthcare services and is the provider of a leading multi-national
multi-disciplinary telehealth offering. WELL is publicly
traded on the Toronto Stock Exchange under the symbol "WELL"
and is part of the TSX Composite Index. To learn more about the
company, please visit: www.well.company.
Forward-Looking Information
This news release may contain "Forward-Looking Information"
within the meaning of applicable Canadian securities laws,
including, without limitation: information regarding the Company's
goals, strategies and growth plans; the expected benefits and
synergies of completed acquisitions; the expected financial
performance as well as information in the "Outlook" section
herein. Forward-looking information are necessarily based
upon a few 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 using 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 information 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
information and the forward-looking information are not guarantees
of future performance. WELL's statements expressed or implied
by these 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
statements. Forward-looking information are qualified in
their entirety by inherent risks and uncertainties, including:
direct and indirect material adverse effects from the COVID-19
pandemic; adverse market conditions; risks inherent in the primary
healthcare sector in general; regulatory and legislative changes;
that future results may vary from historical results; inability to
obtain any requisite future financing on suitable terms; any
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.sedar.com, including its most recent Annual Information Form.
Except as required by securities law, WELL does not assume any
obligation to update or revise any forward-looking statements,
whether because of new information, events or otherwise.
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SOURCE WELL Health Technologies Corp.