- CloudMD Software & Services (DOC) has signed a definitive agreement for its majority acquisition of West Mississauga Medical
- Under the terms of the deal, CloudMD will acquire 51 per cent of the clinic’s outstanding securities for C$140,000 in cash and $60,000 in common shares at a price of 81 cents each
- The acquisition is part of the CloudMD’s broader strategy for entering the US market with its comprehensive suite of telehealth products
- West Mississauga Medical generated more than $1.8 million in revenue for the 2019 calendar year
- CloudMD Software & Services (DOC) is currently up five per cent and is trading at 84 per share
CloudMD Software & Services (DOC) has signed a definitive agreement for its majority acquisition of West Mississauga Medical.
Under the terms of the acquisition, CloudMD will acquire 51 per cent of West Mississauga Medical and its assets and operations for a total of C$200,000. This will be comprised of a cash component worth $140,000 and $60,000 in common shares.
Pursuant to the agreement, the shares will be issued at a deemed price of $0.81 each, based on the company’s ten-day volume weighted trading price.
The clinic is managed by Dr. Fred Roh and Curtis Gibson. Fred has more than 30 years of experience in the US healthcare market, and is the founder of Healthcare Networks of America, which provides services to 24 million patients across the US via 15,000 member physicians.
Using CloudMD’s Telehealth platform, Fred will assist in the expansion of a network of Telehealth-powered satellite clinics, which CloudMD hopes will cover large areas of currently under-served regions in the US.
Curtis, on the other hand, will manage the Mississippi clinic. He has substantial experience in investment banking and medical-related business development, and will also assist in the roll-out of CloudMD’s services.
CloudMD’s acquisition of the clinic is expected to be immediately accretive. West Mississauga Medical generated more than $1.8 million in revenue during the 2019 calendar year, with EBITDA margins exceeding 11 per cent.
The company’s acquisition comes as part of a broader North American expansion strategy. One of the company’s key goals is to begin providing a single, comprehensive stop for long-term care of chronic and complex patients.
The timing of the deal is particularly relevant, given the US Trump Administration’s recent announcement of an “unprecedented expansion of telemedicine” in an attempt to manage the current COVID-19 pandemic.
CloudMD Software & Services (DOC) is currently up five per cent and is trading at 84 cents per share at 11:43am EDT.
