- Telemedicine provider, CloudMD Software & Services (TSXV:DOC) has signed a binding term sheet to acquire a medical clinic in Vancouver
- The clinic services over 60,000 patients, offers specialist services, and generated C$3 million in revenue in the last fiscal year
- CloudMD will pay $200,000 cash and $500,000 in CloudMD shares, in exchange for the clinic’s business, assets, and operations
- The company was able to accelerate its acquisition plans thanks a recently closed oversubscribed bought deal financing
- CloudMD Software & Services (DOC) is down 2.78 per cent and is currently trading at 70 cents per share
Telemedicine provider, CloudMD Software & Services (TSXV:DOC) has signed a binding term sheet to acquire a medical clinic in Vancouver.
CloudMD has agreed to purchase all of the medical clinic’s outstanding securities for an aggregate amount of $700,000. This will consist of $200,000 cash, and up to $500,000 in CloudMD shares, for the clinic’s business, assets, and operations.
The clinic’s team of 24 healthcare professionals, including 12 physicians, serves over 60,000 patients. It provides services across various medical specialities, including mental health, women’s health, sports medicine, gynecology, and psychiatry.
The clinic already uses online booking and telemedicine, which will assist with its integration into CloudMD’s EMR software and network. In the fiscal year ending December 31, 2019, the cashflow-positive business generated approximately C$3 million in revenue.
A portion of the purchase price will be subject to the clinic achieving certain performance targets. The acquisition itself will also be subject to the execution of a definitive agreement and TSX Venture Exchange approval.
This acquisition represents an unexpected acceleration of the company’s plans for growth. Thanks to COVID-19, and a recent, oversubscribed bought deal financing, CloudMD was able to fast-track its acquisition strategy.
CloudMD’s CEO, Dr Essam Hamza, commented on the company’s fast-tracked acquisition plans.
“COVID-19 and the cash injection from the most recent financing were transformational for us, and accelerated our growth plans by three to five years.
“The funds raised gives us a war chest of capital to deploy on strategic, accretive acquisitions already in our due diligence pipeline.
“The acquisition of this clinic not only increases our top line revenue by $3 million, but it’s also an important part of our growth strategy, as we expand our hybrid digital clinic footprint across Canada and the United States,” he said.
The company expects a definitive agreement for the acquisition on or before July 31, 2020.
CloudMD Software & Services (DOC) is down 2.78 per cent and trading at 70 cents per share at 11:33am EDT.