CloudMD to Acquire the Largest Medical Directory in Canada with Robust, Up-to-Date, Information on 91,000 Practicing Physicians and 10,000 Residents and Nurse Practitioners
Canadian Medical Directory is the largest directory of trusted, highly-segmented
information on doctors and medical professionals
- Highly complementary for CloudMD to integrate, optimize and cross sell its suite of products including Juno EMR, iMD Health and Snapclarity
100% SaaS based, high margin, revenue model with significant opportunities to drive and optimize revenue
VANCOUVER, British Columbia, Oct. 21, 2020 (GLOBE NEWSWIRE) -- CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF, Frankfurt: 6PH) (the “Company” or “CloudMD”), a telehealth company revolutionizing the delivery of healthcare to patients, is excited to announce that it has entered into a Binding Term Sheet (“Term Sheet”) to acquire the Canadian Medical Directory (“CMD”), Canada’s largest, most trusted, directory of medical professionals including 91,000 practicing physicians and 10,000 residents and nurse practitioners across the country. The robust, multi-layered database is genuinely unique as no other direct competitor has a SaaS platform that collects and vends the data in such a highly segmented, up-to-date way.
For 65 years, CMD has been trusted as the gold standard for information and is considered the only reliable resource for all provinces' medical professionals in a standard national format. CMD is Canada’s leading source for profile and contact information on practicing physicians — both general practitioners and medical specialists— and nurse practitioners, across the country. With up-to-date information, it’s a key reference tool used by clinics, hospitals, medical placement firms, pharmaceutical companies, and manufacturers and distributors of medical equipment and supplies. CMD has very high brand recall and recognition as a trusted source of information.
Having accurate information on every medical practitioner across the country will be immediately valuable for CloudMD to cross sell, and optimize its suite of products. CloudMD will be able to integrate the CMD database into its Juno EMR, billing, virtual care and telehealth platforms, as well as iMD Health’s leading educational resource databank. This acquisition will allow CloudMD to leverage the CMD brand, customer network and data, to power up and accelerate doctor acquisition and adoption. The acquisition will also enable CloudMD to use its suite of products and resources to continue building and growing CMD’s robust database.
With CloudMD’s significant network, there is also an opportunity to broaden and expand CMD’s current enterprise and institutional client base to drive further revenue. CloudMD plans to do this by cross-selling key CMD offerings including CMD’s API for Insurers, which helps with Medical Insurance fraud detection, CMD’s pending integration with Salesforce, HubSpot and MS Dynamics and CMD’s newest integration with Clinia.com, who has integrated the CMD data into its next generation Canadian health resource directory.
CMD is wholly-owned by Owen Media Partners, an information services leader founded by CEO Hugh Owen. Through its MacRAE'S and Scott's Directories brands, Owen Media has helped tens of thousands of businesses with their B2B Lead Gen and digital marketing strategies and attracted more than 500 million visitors to its own websites. Founded in 1995, Owen Media has operations in Toronto and Delhi, India and a sales network in Canada and the US.
The acquisition of CMD will be immediately accretive to CloudMD’s top line with the 100% SaaS and high margin revenue model. CMD generated approximately $450,000 in revenues with earnings before interest, taxes, depreciation and amortization (EBITDA) margins exceeding 65%, resulting in an EBITDA of approximately $293,000 over the 12-month period ending September 30, 2020. The Company believes that there is significant opportunity to further optimize the revenue through integration and optimization.
Essam Hamza, CEO of CloudMD commented, “This acquisition reflects another important piece of our strategy to provide a whole-person, longitudinal approach to healthcare delivery. Having CMD’s robust, segmented database of health practitioners across Canada will be extremely valuable for our business and opens up synergies and opportunities for optimization, cross selling, public sector and private corporate partnerships. Over the years, Hugh has continued to build an incredible product, which combined with our platform, will be a powerful tool to help Canadians and the overall healthcare sector. Built by a team of doctors, we understand the pain points of the healthcare sector, and having an accurate data rich database like CMD will provide important data-sets that we can add to, which will in turn provide better service and care to patients. We are thrilled Hugh and the CMD team decided to partner with CloudMD, and we look forward to working with them on integrating and expanding our services.”
Hugh Owen, CEO of Owen Media commented, “We are excited to work closely with Essam and the entire CloudMD team. Pairing the Canadian Medical Directory with CloudMD was a natural fit, placing one of Canada’s most trusted medical brands into the heart of the telehealth revolution. Using the directory, CloudMD will be able to bring its own message to more doctors, clinics and hospitals as well as drive growth into CMD’s traditional SaaS information business. We can’t wait to get started!”
Terms of Agreement
In consideration for the purchase of 100% of the assets and business of CMD, CloudMD has agreed to pay aggregate consideration of $1.95 million payable as follows: (i) $250,000 in cash; (ii) $1.35 million in shares of the Company; and (iii) a performance-based earnout of $350,000, which is payable in shares of the Company in annual issuances over a period of two years. All shares issued pursuant to the acquisition are issued at a deemed price of $2.35 per share and are priced by calculating the 10-day volume-weighted average trading price of the Company's shares for the 10 trading days prior to the execution of the binding term sheet. The shares will be subject to certain contractual restrictions on trading for a period of 16 months from the date of issuance.
The company also announces the granting of stock options to purchase an aggregate of 400,000 common shares of the Company at an exercise price of $2.40 per share for a five-year term. The stock options were granted pursuant to the Company’s Stock Option Plan and the policies of the TSX Venture Exchange, to an officer of the Company.
About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare by providing patients access to all points of their care from their phone, tablet or desktop computer. The Company offers SAAS based health technology solutions to medical clinics across Canada and has developed proprietary technology that delivers quality healthcare through the combination of connected primary care clinics, telemedicine, and artificial intelligence (AI). CloudMD currently provides service to a combined ecosystem of 376 clinics, over 3000 licensed practitioners and almost 3 million patient charts across its servers.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD"
Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
VP, Investor Relations
Forward Looking Statements
This news release contains forward-looking statements that are based on CloudMD’s expectations, estimates and projections regarding its business and the economic environment in which it operates, including with respect to its business plans and its intended use of the proceeds of the Offering. Although CloudMD believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. These forward-looking statements speak only as of the date on which they are made, and CloudMD undertakes no obligation to update them publicly to reflect new information or the occurrence of future events or circumstances, unless otherwise required to do so by law.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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