WELL Health Technologies Corp.
(WELL-T) C$7.36
Highlights from Investor Meetings
Event
Yesterday, we hosted investor meetings with Chairman and CEO, Hamed Shahbazi.
Impact: NEUTRAL
The strategic value of CRH Medical. Although much has been made of the significant financial accretion the deal offers, there are many strategic benefits that seem to be underappreciated by some investors. Although CRH does not own clinics that WELL can sell its various solutions and services into, it does serve over 70 Ambulatory Surgery Centers (ASCs) and has over 400 GI partners, which it can target. There are also ~3,200 O'Regan trained GIs.
Management indicated that it would likely lead its cross-selling efforts with its cybersecurity offering, given most clinics lack proper protection from cyber attacks/ threats. It will also offer its telehealth solution, as it believes that up to one-quarter of pre- and post-operation patient visits can be done virtually. In addition, it may acquire an EMR solution that is or could be tailored to GI practices.
Well-positioned in the telehealth market. There has been plenty of activities in the North American telehealth market recently, including Amazon's expansion into the B2B market, industry M&A, and capital raises (some were detailed in our note last week).
WELL feels comfortable in its position as one of the leading telehealth players in Canada, with its Tia Health and VirtualClinic+ platforms, that it believes have helped put it #1 in omni-channel patient visits in Canada. In addition, given its view that after the pandemic, temporary telehealth billing codes will become permanent, it feels confident in the strength of its leading B2C telehealth business going forward.
M&A pipeline is strong; U.S. IPO upcoming. WELL has nine signed LOIs spread out across its business units, as well as one that would represent a new business line. Should these LOIs turn into closed deals, and including CRH, WELL has indicated that pro forma revenue would be >$400mm, with Adjusted EBITDA of >$100mm.
Once the CRH deal closes (shareholder vote is on April 16), WELL's business will grow significantly, particularly in the U.S. (>50% of revenue will be in the U.S. post- close), and position it well for a U.S. IPO (targeting this fall).