This morning's G&M In response to Monday’s announcement of the $19.25-million acquisition of New Zealand’s Intrahealth Systems Ltd., Desjardins Securities analyst David Newman raised his rating for WELL Health Technologies Corp. (
) to “buy” from “hold,” seeing the deal as “a retracing back to WELL’s core advantage as a hybrid healthcare provider.”
“The valuation is attractive when compared with WELL’s past EMR [electronic medical records] deals (3.5–4.0 times revenue), especially with Intrahealth being its 10th and largest EMR acquisition to date,” he said.
Mr. Newman pointed to a trio of benefits from the deal: an expansion of its EMR addressable market and “firmly positioning it as an international operator with a multi-product business;” the ability to market Intrahealth’s Profile EMR product alongside its own OSCAR offering; and the benefit integrating Intrahealth to the apps.health marketplace, “paving the way for third-party developers to have the digital health apps available for both OSCAR Pro and Intrahealth.”
The analyst maintained a $10.50 target for the Vancouver-based company’s shares. The average on the Street is $11.53.
“We are upgrading ... given the United Digestive resign by CRH, stronger digital health SaaS revenue with high-margin recurring revenue, Intrahealth’s attractive valuation and a potential U.S. listing,” Mr. Newman said.