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Enter Symbol
or Name
USA
CA



Well Health Technologies Corp
Symbol WELL
Shares Issued 80,869,624
Close 2018-08-24 C$ 0.56
Market Cap C$ 45,286,989
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Well Health to acquire 13 more private clinics in B.C.

2018-08-28 09:48 ET - News Release

Mr. Hamed Shahbazi reports

WELL HEALTH ANNOUNCES PROPOSED ACQUISITION OF THIRTEEN MORE PRIVATE MEDICAL CLINICS TO CREATE LARGEST CHAIN OF CLINICS IN BC

Well Health Technologies Corp. has entered into arm's-length share purchase agreements, each dated Aug. 27, 2018, with Dr. Michael Frankel, MD, and various other third party physician shareholders, in respect of 13 proposed acquisitions, whereby, on the closing thereof, the company has agreed to acquire all of the issued and outstanding shares of such target companies that own and operate an aggregate of 13 private health care clinics in British Columbia. In total, after the transaction, Well Health Technologies will own and operate a total of 19 clinics.

Highlights:

  • Highly accretive transformational acquisition will more than triple the number of clinics owned and operated by Well Health Technologies to 19, serving more than 600,000 patient visits per year when combined with Well Health Technologies' current business on a posttransaction basis;
  • Based on trailing performance and expected synergies, the new clinics are expected to drive close to $1.2-million in EBITDA (earnings before interest, taxes, depreciation and amortization) per year and more than $19-million in revenues to Well Health Technologies in the 12 months after closing;
  • Well Health Technologies will have more than 357 health professionals and medical office staff working at all of its facilities on a posttransaction basis;
  • Well Health Technologies is already fully financed to support this transaction based on its previously announced financing led by Ka-Shing Li and Well Health Technologies' own chief executive officer, Hamed Shahbazi, which closed May 15, 2018;
  • Dr. Frankel to be appointed chief medical officer of the company upon closing.

"We're very pleased to welcome the dedicated health care professionals and office staff of these fine clinics to Well's operation," said Mr. Shahbazi. "To our knowledge, this acquisition creates the largest single chain of health care clinics in British Columbia and is consistent with our strategy to augment scale in our operations such that we can make the necessary technology investments to better support doctors and patients and improve health outcomes."

Dr. Frankel, who had previously joined Well Health Technologies as director of medical clinic operations, will be appointed chief medical officer on the closing of the transaction and will not only help ensure the smooth transition of the acquisitions, but also oversee medical operations of the entire company.

"After more than 16 years of operating primary health care clinics in British Columbia, I'm very excited to join forces with the team at Well Health," said Dr. Frankel. "I look forward to empowering our doctors and patients with digital technologies that help improve the doctor and patient experience."

The total consideration payable by Well Health Technologies in connection with the transaction is approximately $6,352,000, consisting of: (i) a payment upon closing of the transaction of $4,959,000 consisting of $4,222,000 in cash and 1,638,627 common shares of the company at a deemed price of 45 cents per share (the cash portion of which is subject to a 7.5-per-cent holdback to be released after three months); and (ii) a time-based earnout of $1,393,000 payable quarterly over three years consisting of $1,161,000 cash and $231,369 issuable in common shares of the company priced in the context of the market and subject to a floor of 45 cents per share.

In addition to customary closing conditions, the agreements provide that the closing of the transaction is subject to the following conditions: (i) the parties shall have obtained all consents and approvals for the transaction; (ii) Dr. Frankel shall have entered into an employment agreement with the company as chief medical officer of the company; and (iii) the TSX Venture Exchange shall have approved the transaction.

The transaction is expected to constitute a fundamental acquisition in accordance with Policy 5.3 of the TSX-V. All shares issued in the transaction will be subject to a restricted period of four months and one day. There are no finders' fees payable in connection with the transaction.

We seek Safe Harbor.

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