In a news release, telemedicine company CloudMD Software & Services Inc. (DOC:TSX.V; DOCRF:OTCQB; 6PH:FSE) announced that it plans to acquire a Metro Vancouver, B.C., medical clinic. The firm indicated that it has already signed a Binding Term Sheet to purchase 100% of the clinic's business, assets and operations.
CloudMD reported that the recent oversubscribed bought deal financing positioned it with significant capital allowing it the capability to accelerate its M&A activity to scale and grow the business. The company advised that that the acquisition of the clinic is an integral part of its top-line revenue growth strategy.
The firm stated that the clinic, which operates from one location with 24 healthcare professionals across various specialties including mental health, sports medicine, women's health, gynecology and psychiatry, is a premier provider of integrated medical solutions and an early adopter of telemedicine delivery. The company indicated that the clinic should be easily integrated into CloudMD's EMR software and clinic network as it is currently using online booking, EMR and telemedicine.
CloudMD's CEO Dr. Essam Hamza remarked, "COVID-19 and the cash injection from the most recent financing were transformational for us and accelerated our growth plans by 3-5 years. The funds raised gives us a war chest of capital to deploy on strategic, accretive acquisitions already in our due diligence pipeline. The acquisition of this clinic not only increases our top line revenue by $3 million, but it's also an important part of our growth strategy as we expand our hybrid digital clinic footprint across Canada and the U.S."
The company reported that it has agreed to pay the shareholders (pro-rata) aggregate consideration of up to CA$700,000 for 100% of the outstanding securities of the medical clinic, payable as up to CA$200,000 in cash and up to CA$500,000 in shares of CloudMD.
The firm noted that it expects to finalize the acquisition by July 31, 2020, and that the purchase remains subject to customary closing conditions including the execution of a definitive acquisition agreement and receipt of TSX Venture exchange approval.
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