CloudMD Expands Virtual Mental Health Services Through Acquisition of Aspiria Corp., a Healthcare Provider Focused on Delivering Employee (EAP) and Student (SAP) Assistance Programs
Supports CloudMD’s objective of strengthening its virtual care solutions with proven mental health and work life tools that address the unique needs of students, employees, and family
- Network of over 750 organizations and 1 million students, employees and family members already using Aspiria services.
- Targets important education sector through Student Assistance Programs, providing support to elementary, post-secondary, and international students.
- Student mental health support in high demand with 26.3% of Canadian post-secondary students reported having been diagnosed or treated by a professional for one or more mental health conditions within a 12 month period (with anxiety and depression being the most frequent). (1)
- Increases clinical network to approximately 7,500 therapists in North America.
- Cash flow positive with $3.4 million revenue run rate in 2020 and expected EBITDA margins greater than 20%.
VANCOUVER, British Columbia, Jan. 18, 2021 (GLOBE NEWSWIRE) -- CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF, Frankfurt: 6PH) (the “Company” or “CloudMD”), a telehealth company seeking to revolutionize the delivery of healthcare to its members, is pleased to announce that it has signed a binding term sheet (“Term Sheet”) to acquire 100% of Aspiria Corp., (“Aspiria”), an integrated, Employee (EAP) and Student Assistance Services (SAP) company, which focuses on a comprehensive suite of mental health and wellness solutions for all employer and educational sectors. Aspiria currently serves over 750 organizations, with 1 million employees, students, and their families, in Canada and internationally.
Aspiria provides a technology-driven mental health support solution that gives access to clinical services for mental and situational life issues impacting wellbeing. CloudMD will leverage Aspiria’s technology and digital care solutions combined with the traditional in-person counselling to meet the unique needs of students and employees across North America. Aspiria offers its members flexibility of access to connect via telephone, email and on-demand digital platforms that provides online mental health resources, Internet-based cognitive behavioural therapy (iCBT), cancer support, and a network of professional therapists. Currently, the program is used by employers, individuals, insurers and the student education market, effectively blending intervention with technology and the human touch, supporting a variety of mental health issues. This is accomplished through a suite of digital tools combined with a traditional short-term counselling model designed by clinicians and grounded in evidence-based practices that are proven to positively impact outcomes.
Aspiria will become part of CloudMD’s Enterprise Health Solutions Division and is immediately synergistic with a number of healthcare solutions in the division. Aspiria will complement CloudMD’s other mental health solutions including Snapclarity and HumanaCare to promote effective and efficient clinical best practices in managing mild, moderate and chronic conditions. Aspiria has an already established target market of students, which creates an opportunity to provide other solutions to this important demographic. Aspiria will be vertically integrated to increase distribution channels and increase demographic coverage within the division. The addition of Aspiria increases CloudMD’s clinical network to approximately 7,500 therapists and mental health professionals in North America.
Aspiria's current annualized revenue run rate(2) is approximately $3.4 million. It is expected that Aspiria will generate an EBITDA (earnings before interest, taxes, depreciation and amortization) margin greater than 20% with non-speculative post acquisition synergies. CloudMD continues to expand its’ footprint into specialised segments, like Student Assistance Programs, and continues to scale its operations. Upon closing, the acquisition of Aspiria will be immediately accretive to CloudMD with synergies the company believes will drive further revenue and increased EBITDA margins throughout its Enterprise Health Service division.
Karen Adams, Global Head, Enterprise Health Solutions Division commented, “Corporate leaders are tasked with ensuring companies have appropriate services to support individuals during these unprecedented times of isolation, constant changes to balancing work and elder/child care, financial concerns, fear and anxiety. There is an increasing need to carefully choose mental health solutions to be assured that individuals have access to the treatment that will lead to recovery. This acquisition will enable employers to rely on CloudMD to assess mental health issues and depend on the healthcare team to ensure the appropriate treatment plan. This will optimize enterprise spend, increase member satisfaction while addressing inclusion and diversity for mental health. ”
Charles Benayon, Founder & CEO of Aspiria commented, “Becoming part of the CloudMD family means we can do even more to inspire and motivate organizations on their journey to better health. This is just the beginning because we’ll be able to change the landscape of how mental health solutions are provided to students, employers, and individuals, by innovating faster, providing more choices, and providing continuity of care to support shifting organizational health and wellness needs. On our own, we pushed the bounds of what was possible from the ground up by providing 24/7, multilingual, short-term mental health services. With access to CloudMD’s incredible resources, knowledge and global platform, the transformation of delivering mental health care to organizations in the employer and student markets will be truly limitless. We look forward to working with the extended CloudMD team in contributing to their pioneering approach in managing the wellbeing of organizations and its members.”
Terms of Acquisition
In consideration for the purchase of 100% of the outstanding securities of Aspiria, CloudMD has agreed to pay shareholders of Aspiria aggregate consideration of $3 million payable as follows: (i) $1.2 million in cash, subject to a working capital adjustment; (ii) $1.05 million in common shares of the Company; and (iii) a performance-based earnout of $0.75 million, which is payable in common shares of the Company after a period of 1 year. All common shares issued pursuant to the acquisition will be issued at a deemed price of $2.28 per common share and are priced by calculating the 10-day volume-weighted average trading price of the Company's common shares for the 10 trading days prior to the execution of the binding term sheet. The common shares will be subject to certain contractual restrictions on trading for a period of 30 months from the date of issuance. The acquisition is subject to customary closing conditions, including the execution of a definitive acquisition agreement and receipt of TSX Venture Exchange approval.
(2) Annual revenue run rate figures are calculated based on annualizing the available results for the 11-month period ending November 30, 2020.
About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare by providing a patient centric approach, with an emphasis on continuity of care. The Company offers SAAS based health technology solutions to
healthcare providers across North America and has developed proprietary technology that delivers quality healthcare through a holistic offering including hybrid primary care clinics,
specialist care, telemedicine, mental health support, educational resources and artificial intelligence (AI). CloudMD currently services a combined ecosystem of over 500 clinics, almost
4000 licensed practitioners and 8 million patient charts across North America.
About Aspiria Corp.
Established in 2003, Aspiria Corp. is a 100% Canadian-owned mental health solution-based company, that provides Employee and Student Assistance Services to over 750 organizations in the employer and education sectors. Servicing over 1 million employees, students, and families, Aspiria is known for its quality services, excellent customer service, and high value it provides to its clients.
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, including statements regarding projected revenue, completion of the Aspiria acquisition, future business synergies and cost savings. Such forward-looking statements are based on CloudMD’s expectations, estimates and projections regarding its business and the economic environment in which it operates, including the expectations regarding closing of the Asipira acquisition and the ability of the Company to carry out its business plans. 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, including revenue projections, 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.
Non-GAAP and Non-IFRS Measures
This press release refers to “EBITDA” and “EBITDA margins” which are non-GAAP and non-IFRS financial measures that do not have a standardized meaning prescribed by GAAP or IFRS. The Company’s presentation of these financial measures may not be comparable to similarly titled measures used by other companies. These financial measures are intended to provide additional information to investors concerning the Company’s and Aspiria’s performance. EBITDA is defined as earnings before interest, taxes, depreciation and amortization and EBITDA margins is defined as EBITDA as a percent of total revenue. EBITDA and EBITDA margins are Non-IFRS measures the Company uses as an indicator of financial health and excludes several items which may be useful in the consideration of the financial condition of the Company and Aspiria, as applicable, including interest expense, income taxes, depreciation, and amortization.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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