CloudMD Sells Several Assets At A Loss To Well Health

CloudMD Software & Services (TSXV: DOC) is apparently in the process of selling off certain assets. It was announced this morning that the firm has sold three primary healthcare clinics as well as an electronic medical records program to that of Well Health (TSX: WELL).

The primary care clinics in question are located in British Colombia, with two locations found in Vancouver, and the third found in Surrey. Cloud Practice, the EMR being acquired, meanwhile is said to be the second largest OSCAR-based platform utilized by physicians, next to Well’s own offering, and enables Well Health to enter the Alberta and Saskatchewan EMR markets.

The transaction will see CloudMD collect $5.75 million on the asset divesture, with Well Health said to be paying $5.1 million in upfront cash, with the remaining funds subject to a holdback period. The company has indicated that the sale “is not expected to have a material impact on the company’s EBITDA or operating cash flows.”

Well Health sees it slightly different however, with the company forecasting that the newly acquired assets will generate “more than $9.0M in topline revenues,” while also operating profitably.

READ: CloudMD Posts $40.3 Million In Revenue, $44.2 Million Net Loss In Q2 2022

Notably, the sales come at a loss for CloudMD. The company originally acquired Healthvue, the Vancouver based clinics, in 2018 for $4.0 million in cash and shares, while the Surrey Clinic was acquired for $0.7 million two years ago. Cloud Practice itself was acquired for $5.0 million in 2018, indicating that the firm has taken a major loss on the transaction as a whole.

CloudMD last traded at $0.24 on the TSX Venture.

Information for this briefing was found via Sedar and CloudMD Software & Services. The author has no securities related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.