Canadian company WELL Health, which offers front- and back-office management software applications for physicians, announced its plans to exercise its call right to acquire a majority controlling interest in precision care company HEALWELL AI concurrent with the anticipated closing of HEALWELL’s proposed acquisition of Orion Health on April 1.
HEALWELL AI is a preventative healthcare company that offers AI and software to providers that allows them to screen for and detect rare, complex and chronic diseases.
WELL Health and fellow Canadian company HEALWELL have partnered for years and signed a Call Option Agreement in 2023. Under that agreement, WELL Health is exercising its call right.
In December, HEALWELL AI announced it was making a multi-million-dollar purchase of New Zealand-based Orion Health to combine its data infrastructure and AI capabilities. Orion Health is a subscription license and services revenue business.
HEALWELL signed a deal to acquire Orion for CA$165 million, or NZ$200 million ($115 million). The deal is expected to close on April 1.
Following the acquisition of Orion Health, HEALWELL will have approximately 261.5 million Class A shares outstanding, and after exercising the call option, WELL Health will own around 37.3% of economic interest and 69.6% of voting rights in HEALWELL.
WELL Health will acquire 61.6 million shares (30.8 million Class A and 30.8 million Class B) from HEALWELL AI’s existing shareholders.
Vancouver-based WELL Health will obtain control of HEALWELL under International Financial Reporting Standards and consolidate HEALWELL’s financial results as a company subsidiary.
The deal will also allow WELL to nominate a majority of HEALWELL’s board of directors.
WELL anticipates HEALWELL will contribute approximately $160 million in revenue with positive Adjusted EBITDA to its consolidated financial statements over the next 12 months.
THE LARGER TREND
Earlier this year, WELL Health announced it has completed seven acquisitions since December 2024, which were paid for by cash with no shares issued. The acquisitions represented an annualized revenue run-rate of approximately $100 million at EBITDA margins.
The seven acquisitions were a physician recruitment firm in Canada, two primary care Canadian clinics, a provider staffing acquisition in the U.S., two acquisitions under its WELLSTAR banner and its acquisition of Jack Nathan Health.
WELL Health’s last reported earnings – for the third quarter of 2024 – exceeded a $1 billion annualized revenue run-rate, with record revenue of $251.7 million, a 23% increase from the $204.5 million reported in Q3 2023, the company said.
The company also reported Canadian Patient Services revenue of $78 million in Q3 2024, an increase of 35% compared to $57.8 million in Q3 2023, and U.S. patient services revenue of $158.2 million in Q3 of 2024, compared to $130.7 million in Q3 2023.
Adjusted gross profit was $112.3 million in the third quarter of 2024, an increase of 19% compared to $94.2 million in Q3 2023.
Adjusted EBITDA was $32.7 million in Q3 2024, an increase of 16% compared to $28.2 million in Q3 2023.
