WELL Health Technologies Corp T.WELL

SOC Telemed (TLMD) Acquired by Patient Square Capital

[monty613]

$125MM Revenue company taken over at a huge premium by a private equity firm

100MM shares O/S

https://stockhouse.com/news/press-releases/2022/02/03/soc-telemed-to-be-acquired-by-patient-square-capital


Under the terms of the agreement, SOC Telemed stockholders will receive $3.00 in cash per share of Class A common stock ("the common stock"). The per share purchase price represents a premium of approximately 366.1% over SOC Telemed's closing share price on February 2, 2022, the last full trading day prior to the transaction announcement and a 93.1% premium to SOC Telemed's sixty-day volume-weighted average price (VWAP) through February 2, 2022.

[HotDiggityDogg]

This is encouraging news. I think WELL's assets such as WISP and Circle could end up in a similar way but not sure about the clinics. As you have said many times I think CEO having divided the assets into two groups had the same plan which is to ultimately sell each division off. ( hopefully for top premium ) 

[monty613]

the clinics are extremely valuable. in the private marketplace, companies like this trade for 10X-15X EBITDA because they are stable, profitable, high margin cashflow generating businesses. there is lots of consolidation happening in the healthcare services space. healthcare is also extremely defensive and these assets would be attractive to a PE player looking for a defensive play.

[HotDiggityDogg]

Ok. Can you take an educated guess as to what the combined value of both types of assets would be for WELL? In case CEO was offered a buyout by different buyers for each part ( virtual and patient services ?) 

[monty613]

the hypergrowth of Circle/WISP is the wild card. telehealth assets were trading at 10X Revenues during the height of the pandemic. the other wildcard is that CRH and MyHealth can grow relatively quickly with some easy bolt-on acquisitions.  as of TODAY, spitballing a # would look something like this. please take this with a grain of salt. Circle/WISP - 4-5X Forward Revenue or $400MM-$500MM

[HotDiggityDogg]

This makes perfect sense. Thanks for taking the time to write it up. I'm slowly picking up more shares and seeing some encouraging signs an an otherwise horrible market. ( for well ). My guess is that I'm not the only one and more investors will start to notice what I am noticing. I will be more than happy with a sale of 7-8$ per share if it ever happened. Cheers 

[speedy99]

Monty & Hotdog, I am not inspired by this, lol.  Thankfully, we have the post from danche with the Scotia outlook, and the comment:   "Further out, the team sees a path to $1B topline".  If anyone had wanted to sell at $7.00 to $10.00, including the board, the owners, and us shareholders, we could have done that a year ago.  That, and the outlook for WELL's

[HotDiggityDogg]

Speedy I am not inspired by this either. However I see this as realities of the market. Yes there was a short period from Feb to Aug when WELL could have probably been sold for 10-12$. ( not sure and perhaps Monty can comment ) but those golden days are behind us and I tend to agree with Monty's estimate at current valuation for WELL.  In terms of such sale being approved or not, I

[speedy99]

Hotdog, if Scotia is right and in the longer view we will be approaching a 1 Billion top line run rate, I think we can all agree that this will change market sentiment in our favour.  With a 5 to 1 enterprise value to sales, we could anticipate a modest 5 billion market cap for WELL.  That's the kind of thing I am waiting for, not a lousy $7.00 share price.

[HotDiggityDogg]

I will be very happy to see such market cap but unless the Fed reverses course I don't see those multiples. Also if we go by Scotia's report then wouldn't it make sense to take their 12 month price target as accurate also ? Personally I don't think these reports are anything other than hype. Very same analysts had said WELL is 12$ in 12 months only 3 months ago. Cheers 

[BudFoxx2020]

Lol price targets went from $14 all the way down to $8.  These analyst don't know jack. CIBC $11 to $8 TD $12 to $10 SCOTIA $10 to $9 See  the pattern.  I guess some people just like to pump it when it fits the agenda.  Only thing I will agree is there are buyers right now compared to the last few months and all of last year.  The new range is $4.20 - $5.  

[bandit69]

I've never seen an analyst that has been correct in all my time in the markets.  They all have an agenda hence the titles "buy side" or "sell side" analysts.

[brandinvestor]

Don't forget they also look at market conditions and comparibles. WELL last year compared to it's competition was worth $10-$12 but the entirety of Health Tech is down which means comparibly we are worth $8 now compared to the competition's comparibles.

[BudFoxx2020]

That is what I always preach.  You have to always adjust accordingly to market conditions.  But some people here will have none of it and hate me for pointing it out often. To them WELL is immune from everything.  Anyways I will never believe a word any analyst says.  They are at the low end of the totem pole in the investment worlds.  Traders laugh at them openly.  

[monty613]

that's exactly what happened - the analysts valued the telehealth piece of WELL far higher last year based on what TDOC/AMWL/etc were trading at. multiples were like 10X Revenues and more. a bit rich. when those stocks got decimated, WELL went down with it, along with their price target. the big difference is Circle/WISP don't appear to be in the same level of the cash burn cycle as

[bandit69]

a modest 5 billion ....HAHA.  Sure. :)