- CloudMD (DOC) has signed a binding agreement to acquire Oncidium, one of the largest healthcare providers to Canada’s employer market
- The company will acquire Oncidium for C$30 million in cash, $38 million in CloudMD common shares, and a performance-based earnout of up to $32 million
- Oncidium cares for over two million employees across the country and has over 20 years of experience in the employer health market
- On a consolidated basis, CloudMD will have an annualized revenue run rate over $120 million and overall gross margin of 35 per cent
- CloudMD offers SAAS-based technology solutions to healthcare providers across North America
- CloudMD Software and Services (DOC) is up 4.85 per cent and is currently trading at $2.16 per share
CloudMD (DOC) has signed a binding agreement to acquire Oncidium, one of the largest healthcare providers to Canada’s employer market.
CloudMD will acquire 100 per cent of Oncidium for C$30 million in cash, $38 million in CloudMD common shares at $2.30 per share, and a performance-based earnout of up to $32 million over a three year period payable in cash or common shares.
Oncidium has built an ecosystem of more than 1,000 health care providers and medical assessors, and over 500 clients with more than two million employees across the country.
It has also landed a number of Canada’s Fortune 500 companies as clients over its 20 years in the employer health market.
Oncidium offers solutions for absentee management, short-term and long-term disability, workers’ compensation claims management, mental health assessment and evaluation services that focus on prevention, accommodation and recovery.
CloudMD can now provide a comprehensive enterprise healthcare solution to a combined network of over 5,500 clients and five million employees across North America.
The acquisition will also be synergistic for the following reasons:
- It will be instantly accretive with LTM revenues of $37 million and an adjusted EBITDA margin exceeding 14 per cent with a current 4-month annualized revenue run rate in excess of $40 million
- It drives revenue and margin expansion for the Enterprise Health Solutions Division with an annualized revenue run rate of $53 million, adjusted EBITDA of 10 per cent and a healthy gross margin of 40 per cent
- On a consolidated basis, CloudMD will have an annualized revenue run rate over $120 million, overall gross margin of 35 per cent and positive adjusted EBITDA
Dr. Essam Hamza, CEO of CloudMD, commented,
“This transformative acquisition was another highly strategic decision and part of our overall product roadmap and positions CloudMD as a leader in the employer healthcare market. I am incredibly excited for our future growth as we continue building out our healthcare capabilities.”
Dr. Lu Barbuto, CEO of Oncidium, added,
“The trend lines in Canada and across the industrialized world are clear: the employer is increasingly absorbing employee healthcare costs and is becoming more engaged in managing the related costs and outcomes.
We believe that there will be tremendous opportunities for existing CloudMD services to be delivered to Oncidium’s excellent employer client base so that collectively we can continue to support their growing needs.”
CloudMD offers SAAS-based technology solutions to healthcare providers across North America.
CloudMD Software and Services (DOC) is up 4.85 per cent and is currently trading at $2.16 per share as of 9:49 am ET.