Desjardins 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.