CloudMD Software and Services Inc. (DOCRF)

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CloudMD Announces Divestment of Primary Care Clinics and Cloud Practice to WELL Health.

Source
https://finance.yahoo.com/news/cloudmd-announces-divestment-primary-care-113000771.html

October 11, 2022

CloudMD Software & Services Inc., is pleased to announce that it has entered into a definitive agreement with Well Health Technologies Corp. for the sale of its British Columbia based primary care clinics and Cloud Practice, its cloud-based electronic medical records (“EMR”) and practice management software, for approximately $5.75 million in cash.

In connection with the Transaction, CloudMD has agreed to sell to WELL its brick-and-mortar primary care clinics, HealthVue (Richmond) and South Surrey Medical (Surrey), as well as its Cloud Practice software, which includes Juno EMR and ClinicAid. CloudMD will retain ownership of its online patient portal, MyHealthAccess, and will retain the right (under a licence granted by WELL at closing of the Transaction) to use Juno EMR, which have both been integrated into its Kii Personalized & Connected Care offering. The divestitures of the clinics and Cloud Practice will not affect the services CloudMD currently delivers within its core business and is not expected to have a material impact on the Company’s EBITDA or operating cash flows.

The Company’s divestment of the Clinics and Pharmacies Division is part of the Company’s previously announced overall plan to focus on the performance of its core businesses, Enterprise Health Solutions (“EHS”) and Digital Health Solutions (“DHS”). Divesting these non-core assets will provide additional near-term capital to support the continued growth and innovation of the Company’s employer healthcare offering and allow the Company to focus on improving gross margins and driving profitability.

Karen Adams, CEO of CloudMD commented, “We are executing against our strategy of divesting non-core assets and focusing on our core business to drive organic growth, improve margins and move towards profitability next year. We will continue to reallocate capital from the sale of non-core assets back into the organic growth of the Company and ensure we maximize the potential of our faster growing and higher margin EHS division.”

Transaction Details
The consideration to be paid by WELL in connection with the Transaction is $5.75 million, with $5.1 million being paid in cash at closing and the balance being subject to a holdback. Subject to satisfying the closing conditions, closing of the Transaction is expected in Q4 2022.

INFOR Financial Inc. acted as exclusive financial advisor and Cassels Brock & Blackwell LLP acted as legal advisor to CloudMD.

About CloudMD Software & Services
CloudMD is transforming the delivery of healthcare using technology and by providing a patient-centric approach, with an emphasis on continuity of care. By leveraging healthcare technology, the Company is building one, connected platform that addresses all points of a patient’s healthcare journey and provides better access to care and improved outcomes. Through CloudMD’s proprietary technology, the Company delivers quality healthcare through a holistic offering including hybrid primary care clinics, specialist care, telemedicine, mental health support, healthcare 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 a leading employer healthcare solutions, including its Comprehensive Integrated Health Services Platform, which offers one comprehensive, digitally connected platform for educational institutions, corporations, insurers, and advisors to better manage the health and wellness of their students, employees, and customers.

CloudMD currently services a direct ecosystem of over 5,700 clinicians including, 1,800+ mental health practitioners, 1,600+ allied health professionals, 1,400+ doctors and nurses and covers 12 million individual lives across North America.
For more information visit:
https://investors.cloudmd.ca/

ON BEHALF OF THE BOARD OF DIRECTORS
“Karen Adams”
Chief Executive Officer

FOR ADDITIONAL INFORMATION, CONTACT:
Julia Becker
VP, Investor Relations
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