Post by
jsim082 on Mar 23, 2021 9:16am
Some rambling thoughts on the new acquisition
At the beginning of the news release, the company is referred to as a telehealth company, but in Gunter's statement he says it is a telehealth AI company. Check out a competitor in this space - Well Health, which is also based in BC. https://www.well.company/ It looks like their business is booming. That part is great. Their model is both clinics and AI development. It makes sense - run the clinics and have the side benefit of a bunch of data points to use to develop AI.
Perhaps for us, that is part of where Concierge dovetails in. "Target" may be a company that has expertise in medical AI, and Concierge helps provide the patient data points? Or perhaps this new acquisition comes with clinics as well.
Overall, that seems good. On the other side though, I am concerned about the valuation. They are issuing somewhere between 60 and 120 million DM shares (that news release really is confusing) and those shares should be valued well over 20 cents. So I feel that they have effectively paid a lot more than $12 million for this company. I mean, for those of us that think the share price should already be $1.00 or so, they may have effectively paid $60-120 million for this company. Seeing as Well (the company above) is valued at 1.2 billion right now despite being around since 2010, having the most clinics of any company in BC, being a huge EMR provider and having done some massive acquisitions in the past year - we are obviously acquiring a company with nowhere near that value, yet we are paying something that to me is effectively like 5-10% of it's value.
So overall, it seems like it could be a great industry for them to be entering but I do worry about the way that DM values things in shares. I have the same concern for Perspectum - I have a hard time imagining how that will be worth something like 15 million shares (depending on the VWAP at acquisition). I mean, Perspectum was literally founded 2 years ago and doesn't seem to have too much proprietary about it.
Does anybody have experience with share based acquisitions in other companies? Does what we're doing here seem par for the course? I'd love to know people's thoughts.