WELL Health Closes Trinity Healthcare Acquisition

WELL Health Technologies (TSX:WELL) has locked down a significant portion of Canada’s digital healthcare technology market after closing a C$7.2 million acquisition of one of the country’s largest electronic medical records (EMR) service providers.

The British Columbia-based healthcare digital tech firm told investors on Monday (February 3) that by purchasing all of Trinity Healthcare Technologies’ issued and outstanding shares, it will now support over 1,400 healthcare clinics and more than 8,200 physicians across Canada.

WELL rose 3.8 percent from market close on Friday (January 31) to market open on Monday. As of 3:15 p.m. EST on Wednesday (February 5), its share price sat at C$1.83.

With the deal — the fifth EMR service provider acquisition the company has signed off on — WELL is locking down Canada’s second largest Open Source Clinical Application Resource (OSCAR) EMR service provider, the company said in a press release.

OSCAR is a web-based EMR and billing system used in healthcare facilities in Canada and internationally, and was first created by the Department of Family Medicine at McMaster University.

In an email sent to the Investing News Network (INN), Pardeep Sangha, vice president of corporate strategy and investor relations at WELL, said that with the acquisition, the firm estimates it now holds about 12 percent of the overall market share of physicians in Canada.

Trinity has seen steady growth over the last year, WELL said. In the past 12 months, it has generated over C$2 million in revenue, plus double-digit earnings before interest, taxes, depreciation and amortization margins on its recurring subscription revenue.

WELL expects to get a boost to its balance sheet with the deal. The company said that with the addition of Trinity, it’s now fully financed via cash on hand and issuance of its own stock. The transaction has increased its software-as-a-service revenue as well.

The arm’s length deal was first announced in November, and WELL has boasted that with Trinity’s assets, it will become the third largest EMR provider in Canada. The deal also follows shortly after WELL’s C$1.4 million acquisition of OSCARwest, which was completed in December.

Sangha told INN that more acquisitions are in the works for WELL moving into 2020, including healthcare clinics, EMR vendors and other digital health technologies.

The transaction comes less than a month after the firm got the green light from TMX Group (TSX:X) to graduate to the Toronto Stock Exchange from the TSX Venture Exchange.

In Q3 2019, WELL’s revenue shot up 328 percent year-over-year from C$1.9 million to C$8.2 million.

With the release of its Q4 2019 results, the company expects its revenue to receive a boost from the closing of its acquisition of a majority stake in SleepWorks, which was completed in October, as well as higher seasonal revenue in clinical services.

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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.