Amwell® divests virtual psychiatric care business to Avel eCare in all-cash transaction
Rhea-AI Summary
Amwell (NYSE: AMWL) has announced the sale of its Amwell Psychiatric Care (APC) business to Avel eCare for approximately $21M in cash, plus an additional earn-out payment. The divestment includes APC technology, personnel, and the Asana psychiatric clinical network.
The strategic move aims to sharpen Amwell's focus on key growth areas and its unified digital care platform. Through Amwell Medical Group (AMG), the company will continue providing behavioral health services, including AMG Therapy Services and SilverCloud digital behavioral health.
Amwell has reiterated its 2024 guidance, projecting:
- Revenue between $247-252 million
- Adjusted EBITDA between ($137)-($142) million
- AMG visits between 1.4-1.5 million
The company maintains its goal of achieving positive cash flow in 2026.
Positive
- Sale of APC business for $21M cash plus earn-out strengthens balance sheet
- Strategic focus on core digital platform and software contribution
- Maintains 2024 revenue guidance of $247-252 million
Negative
- Projected negative Adjusted EBITDA of ($137)-($142) million for 2024
- Positive cash flow not expected until 2026
Insights
This strategic divestment of Amwell's psychiatric care business for
The deal's structure, combining upfront cash with performance-based earn-outs, provides immediate liquidity while maintaining upside potential. More importantly, this aligns with Amwell's pivot toward higher-margin software solutions and their goal of achieving positive cash flow by 2026. The focus on SilverCloud and AMG Therapy Services indicates a strategic shift toward scalable digital platforms rather than labor-intensive clinical services.
For investors, this transaction signals management's commitment to operational efficiency and portfolio optimization. The immediate cash injection bolsters the balance sheet at a important time when the company is working toward profitability. The retention of core behavioral health services through AMG suggests a balanced approach to market presence while improving operational economics.
The divestiture reflects broader industry trends where digital health companies are prioritizing platform scalability over direct service provision. By selling APC while retaining SilverCloud's digital behavioral health platform, Amwell is effectively transitioning from a hybrid service-technology model to a more focused technology-first approach.
This strategic realignment positions Amwell to better compete in the enterprise healthcare technology space, where margins and scalability are typically higher compared to direct clinical service delivery. The focus on their "unified, world class digital care platform" suggests a move toward more integrated, API-driven solutions that can be embedded into existing healthcare workflows.
The decision to maintain AMG Therapy Services while divesting psychiatric care demonstrates a nuanced understanding of market dynamics - keeping flexible, technology-enabled services while moving away from more resource-intensive specialized care delivery models. This could lead to improved operational leverage and better positioning for future growth in the digital health platform market.
Divestment of Amwell Psychiatric Care intended to focus product portfolio on key growth initiatives
Company reiterates guidance for 2024
BOSTON, Jan. 09, 2025 (GLOBE NEWSWIRE) -- Amwell® (NYSE: AMWL), a global leader in digital care, today announced it has sold its Amwell Psychiatric Care (APC) business to Avel eCare, a national leading provider of clinician-to-clinician telehealth services.
With the divestiture of APC, a virtual psychiatric care service that Amwell purchased in 2019, Amwell continues to sharpen its focus on key growth areas, driving greater efficiencies and fulfilling clients’ digital care ambitions. Throughout its nearly 20-year history, Amwell has continuously adapted to market demands by leveraging its technology and healthcare expertise to enable clients to deliver high-quality care. The company’s decision to divest APC reinforces its culture of agility and commitment to meeting clients’ virtual care needs.
“The divestment of APC will enable us to increase focus on our unified, world class digital care platform. The transaction strengthens our balance sheet while emphasizing our focus on growing accretive software contribution in our product mix,” said Ido Schoenberg, M.D., Amwell chairman and CEO. “We’re confident Avel eCare will be a wonderful home for our APC business and will continue to offer great value to clients. Their expertise in telehealth and shared commitment to innovation make them the ideal organization to carry forward this important work. We look forward to exploring collaborative ways for Amwell and Avel to serve patients and communities together.”
Avel eCare is purchasing the APC business for approximately
Through Amwell Medical Group® (AMG), the company’s affiliated clinical partner, Amwell remains committed to delivering accessible and convenient behavioral health services, including AMG Therapy Services and SilverCloud® by Amwell digital behavioral health. AMG will continue to be integrated into the Amwell suite of digital care solutions to complement clients’ clinical staffing needs.
“This transaction enables us to place an even greater focus on our mission of connecting and empowering providers, insurers and innovators to deliver more accessible, affordable and high-quality care," said Schoenberg. “It also fortifies our confidence in our stated goal to achieve positive cash flow in 2026.”
Amwell reiterated its guidance for 2024, which calls for:
- Revenue in the range of
$247 million and$252 million - Adjusted EBITDA in the range of (
$137) million and ($142) million - AMG visits between 1.4 million and 1.5 million
About Amwell
Amwell is a leading hybrid care delivery enablement platform in the United States and globally, connecting and enabling providers, payers, patients and innovators to deliver greater access to more affordable, higher quality care. Amwell believes that hybrid care delivery will transform healthcare. We offer a single, comprehensive platform to support all digital health needs from urgent to acute and post-acute care, as well as chronic care management and healthy living. With nearly two decades of experience, Amwell powers the digital care of more than 50 health plans, which collectively represent more than 100 million covered lives, and many of the nation’s largest health systems. For more information, please visit https://business.amwell.com/.
©2025 American Well Corporation. All rights reserved. Amwell®, SilverCloud®, Amwell Converge™, Carepoint™, Amwell Medical Group® and the Amwell logo are registered trademarks or trademarks of American Well Corporation.
About Avel eCare
Avel eCare is a national leader in telemedicine with over 30 years of experience delivering high-quality care across diverse communities. Its services span EMS, ER, Critical Care, Pharmacy, and Behavioral Health. Since launching its Behavioral Health services in 2017 and Crisis Care
in 2019, Avel has led the way in innovative healthcare solutions, providing clinician-to-clinician support and ensuring patients receive the care they need, wherever they are.
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