20:57:17 EDT Thu 30 Jun 2022
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Mindbeacon Holdings Inc
Symbol MBCN
Shares Issued 23,497,520
Close 2022-01-13 C$ 3.46
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CloudMD Software closes Mindbeacon acquisition

2022-01-14 09:26 ET - News Release

See News Release (C-DOC) CloudMD Software & Services Inc

Dr. Essam Hamza reports


CloudMD Software & Services Inc. has successfully completed the previously announced acquisition of Mindbeacon Holdings Inc., one of North America's leading providers of digital mental health care, pursuant to a court-approved plan of arrangement. Pursuant to the Arrangement, former Mindbeacon shareholders are entitled to receive $1.22 of cash plus 2.285 common shares of CloudMD for each common share of Mindbeacon. Following completion of the arrangement, CloudMD has 287,675,749 common shares issued and outstanding, of which approximately 19.1 per cent are owned by former Mindbeacon shareholders.

Mindbeacon's robust digital mental health care platform, combined with its network of over 500 licensed therapists and advanced clinical psychologists, offers a full continuum of care centred around providing users the freedom to choose how, when and where they engage with support.

"We are thrilled to close the acquisition of Mindbeacon, and would like to thank their shareholders, directors and management for the support and collaboration during this process. By uniting CloudMD and Mindbeacon's platforms, we will create a leading, fully integrated health offering that provides effective stepped care across the entire spectrum of physical and mental health care," said Dr. Essam Hamza, chief executive officer of CloudMD. "The acquisition is expected to accelerate our U.S. expansion strategy, a key focus for us in 2022, and improve organic growth by opening new distribution channels and through cross-selling to our 5,500 corporate clients. In addition, we have identified significant cost savings and are excited to integrate Mindbeacon's team and operations to realize further synergies between the businesses. Finally, I'd like to thank our shareholders and key stakeholders who have supported CloudMD's vision and journey. I am looking forward to 2022 and our continued growth and transformation."

Mindbeacon pioneered the digital delivery of evidence-based therapy through a computer or mobile device. As a result, over 50,000 people have been treated by Mindbeacon's therapist-assisted Internet-based cognitive behavioural therapy (TAiCBT), receiving help five times faster than traditional community mental health care. Mindbeacon's TAiCBT delivers impressive outcomes, with 82 per cent of clients reporting self-improvement in mental health, and 67 per cent reporting clinically significant improvement.

"As the need for accessible mental health support continues to grow, it is imperative that the sector innovates to increase accessibility, improve results and reduce costs. The progression of our integrated health services platform, our partnership with employers, advisers and insurers, and the acquisition of Mindbeacon, demonstrates our dedication to being a leader in innovating the mental health space," said Karen Adams, president of CloudMD. "Mindbeacon has one of the best clinically proven solutions in the market today and by adding it to our platform, we can offer a broad range of synchronous and asynchronous services in a cost-effective, stigma-reducing way that meets patients when and where they need. We will be integrating Mindbeacon and all our mental health solutions to support individuals at work, off work or returning to work."

"CloudMD's comprehensive integrated health services platform is the perfect home for Mindbeacon's mental health capabilities. Together, we're an industry-leading holistic health company," said Sam Duboc, former executive chair of Mindbeacon. "I'm thrilled that this opportunity will be able to positively impact our patients and I'd like to thank our shareholders for their overwhelming support and recognition of how much more we will be able to accomplish together."

The addition of Mindbeacon to CloudMD's holistic offering positions the company as a leader within the fast-growing global behavioural health care market, which is expected to grow to $242-billion by 2027 (U.S.), with a compounded annual growth rate of 5.02 per cent between 2020 and 2027. The acquisition is expected to be synergistic by offering the following benefits:

  • Combined, the digital health platform is expected to be one of North America's leading fully integrated health offerings, with a clinically validated, broad continuum of care to address mild, moderate, acute and chronic mental and physical care;
  • Integration into CloudMD's comprehensive integrated health services platform will expand the breadth of interactive technologies and tool sets within behavioural health to support clients with longitudinal multidimensional care;
  • Data interoperability and increased analytic touch points will provide additional valuable data around health care outcomes and improve network effects;
  • Significant cross-selling opportunities through a combined network of 5,500 corporate clients, over five million lives and extensive government contracts;
  • Drive United States expansion through additional capabilities, modalities, cross-selling opportunities and Mindbeacon's recent acquisition of a U.S.-based mental health provider;
  • Mindbeacon's Beacon in a Box white-label iCBT software-as-a-service-offering complements CloudMD's digital health solutions division and may be sold directly to its network of over 20,000 regulated health care professionals;
  • Overall cost synergies, including Mindbeacon, now exceed $4-million.

The companies have already started to integrate Mindbeacon's health care solutions into CloudMD's broad continuum of care. Management anticipates that the acquisition will generate significant run-rate synergies beginning in the first quarter of this year. Such synergies are expected to be realized through cost rationalization, process integration and the scale of the combined organization. The complementary nature of the combined digital health offering is also expected to fuel product cross-selling opportunities to existing CloudMD and Mindbeacon clients.

In connection with closing of the arrangement, CloudMD expanded its management team to include John Plunkett (Mindbeacon's former chief financial officer) as executive vice-president, transformation and strategic planning, and Adam Kelly (Mindbeacon's former president and chief commercial officer) as chief commercial officer, with both positions reporting to Ms. Adams.

Delisting of Mindbeacon common shares

CloudMD intends to cause Mindbeacon to delist its common shares from the Toronto Stock Exchange, to submit an application for it to cease to be a reporting issuer and to otherwise terminate its public company reporting requirements as soon as possible thereafter.

About CloudMD Software & Services Inc.

CloudMD is transforming the delivery of health care using technology and by providing a patient-centric approach, with an emphasis on continuity of care. By leveraging health care technology, the company is building one, connected platform that addresses all points of a patient's health care journey and provides better access to care and improved outcomes. Through CloudMD's proprietary technology, the company delivers quality health care through a holistic offering including hybrid primary care clinics, specialist care, telemedicine, mental health support, health care navigation, educational resources and artificial intelligence (AI). CloudMD's business is separated into three main divisions: clinics and pharmacies, digital solution and enterprise health solutions, the company's fastest-growing division. CloudMD's enterprise health solutions division has built leading employer health care solutions, including its comprehensive integrated health services platform, which offers one comprehensive, digitally connected platform for educational institutions, corporations, insurers and advisers to better manage the health and wellness of their students, employees and customers.

CloudMD currently services a combined ecosystem of over 7,000 psychiatrists, approximately 4,500 therapists and counsellors, approximately 4,000 psychologists, over 22,000 family physicians, over 34,000 medical specialists, over 1,500 allied health professionals, over 500 clinics and over five million individuals across North America.

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