CloudMD Announces Closing of MindBeacon Acquisition, Creating One of North America’s Most Comprehensive Integrated Health Offerings
- CloudMD’s established, proprietary mental health platform offering assessment, navigation, coaching, and work life services paired with MindBeacon’s iCBT, virtual therapy and assessment solutions, creates one of the most comprehensive integrated suite of mental health solutions in Canada – focused on health outcomes for users across a diverse set of purchasing channels
- CloudMD’s Integrated Health Services Platform offers a single point of access to a full range of mental and physical health services, providing users with a seamless experience and clients with meaningful data and analytics
- The acquisition is expected to accelerate CloudMD’s U.S. presence through expanded behavioural health capabilities, modalities, cross-selling synergies and MindBeacon’s recent acquisition of a U.S.-based mental health provider that provides both EAP and a much broader range of behavioural health services to employer populations
VANCOUVER, British Columbia, Jan. 14, 2022 (GLOBE NEWSWIRE) -- CloudMD Software & Services Inc. (TSXV: DOC, OTCQX: DOCRF, Frankfurt: 6PH) (“CloudMD” or the “Company”), a healthcare technology company transforming the delivery of care, is pleased to announce the successful completion of the previously announced acquisition of MindBeacon Holdings Inc. (“MindBeacon”), one of North America’s leading providers of digital mental health care, pursuant to a court-approved plan of arrangement (the “Arrangement”). Pursuant to the Arrangement, former MindBeacon shareholders are entitled to receive $1.22 of cash plus 2.285 common shares of CloudMD for each common share of MindBeacon. Following completion of the Arrangement, CloudMD has 287,675,749 common shares issued and outstanding, of which approximately 19.1% are owned by former MindBeacon shareholders.
MindBeacon’s robust digital mental healthcare platform, combined with its network of over 500 licensed therapists and advanced clinical psychologists, offers a full continuum of care centered around providing users the freedom to choose how, when and where they engage with support.
“We are thrilled to close the acquisition of MindBeacon, and would like to thank their shareholders, directors and management for the support and collaboration during this process. By uniting CloudMD and MindBeacon’s platforms, we will create a leading, fully-integrated health offering that provides effective stepped care across the entire spectrum of physical and mental healthcare,” said Dr. Essam Hamza, CEO of CloudMD. “The acquisition is expected to accelerate our U.S expansion strategy, a key focus for us in 2022, and improve organic growth by opening new distribution channels and through cross-selling to our 5,500 corporate clients. In addition, we have identified significant cost savings and are excited to integrate MindBeacon’s team and operations to realize further synergies between the businesses. Finally, I’d like to thank our shareholders and key stakeholders who have supported CloudMD’s vision and journey. I am looking forward to 2022 and our continued growth and transformation.”
MindBeacon pioneered the digital delivery of evidence-based therapy through a computer or mobile device. As a result, over 50,000 people have been treated by MindBeacon’s therapist assisted internet-based cognitive behavioural therapy (“TAiCBT”), receiving help 5 times faster than traditional community mental health care1. MindBeacon’s TAiCBT delivers impressive outcomes, with 82% of clients reporting self-improvement in mental health, and 67% reporting clinically significant improvement.
“As the need for accessible mental health support continues to grow, it is imperative that the sector innovates to increase accessibility, improve results and reduce costs. The progression of our Integrated Health Services Platform, our partnership with employers, advisors and insurers and the acquisition of MindBeacon, demonstrates our dedication to being a leader in innovating the mental health space,” said Karen Adams, President of CloudMD. “MindBeacon has one of the best clinically-proven solutions in the market today and by adding it to our platform, we can offer a broad range of synchronous and asynchronous services in a cost-effective, stigma-reducing way that meets patients when and where they need. We will be integrating MindBeacon and all our mental health solutions to support individuals at work, off work or returning to work.”
“CloudMD's Comprehensive Integrated Health Services Platform is the perfect home for MindBeacon's mental health capabilities. Together, we're an industry-leading holistic health company,” said Sam Duboc, Former Executive Chair of MindBeacon. “I'm thrilled that this opportunity will be able to positively impact our patients and I'd like to thank our shareholders for their overwhelming support and recognition of how much more we will be able to accomplish together.”
The addition of MindBeacon to CloudMD’s holistic offering positions the Company as a leader within the fast-growing global behavioural healthcare market, which is expected to grow to US$242 billion by 2027, with a compounded annual growth rate of 5.02% between 2020 and 20272. The acquisition is expected to be synergistic by offering the following benefits:
- Combined, the digital health platform is expected to be one of North America’s leading fully-integrated health offerings, with a clinically-validated, broad continuum of care to address mild, moderate, acute and chronic mental and physical care.
- Integration into CloudMD’s Comprehensive Integrated Health Services Platform will expand the breadth of interactive technologies and tool sets within behavioural health to support clients with longitudinal multi-dimensional care.
- Data interoperability and increased analytic touchpoints will provide additional valuable data around healthcare outcomes and improve network effects.
- Significant cross-selling opportunities through a combined network of 5,500 corporate clients, over 5 million lives, and extensive government contracts.
- Drive U.S. expansion through additional capabilities, modalities, cross-selling opportunities and MindBeacon’s recent acquisition of a U.S.-based mental health provider.
- MindBeacon’s “Beacon in a Box” white label iCBT SaaS offering complements CloudMD’s Digital Health Solutions division and may be sold directly to its network of over 20,000 regulated healthcare professionals.
- Overall cost synergies, including MindBeacon, now exceed $4 million.
The companies have already started to integrate MindBeacon’s healthcare solutions into CloudMD’s broad continuum of care. Management anticipates that the acquisition will generate significant run-rate synergies beginning in the first quarter of this year. Such synergies are expected to be realized through cost rationalization, process integration and the scale of the combined organization. The complementary nature of the combined digital health offering is also expected to fuel product cross-selling opportunities to existing CloudMD and MindBeacon clients.
In connection with closing of the Arrangement, CloudMD expanded its management team to include John Plunkett (MindBeacon’s former Chief Financial Officer) as EVP, Transformation and Strategic Planning and Adam Kelly (MindBeacon’s former President and Chief Commercial Officer) as Chief Commercial Officer, with both positions reporting to Karen Adams.
Delisting of MindBeacon Common Shares
CloudMD intends to cause MindBeacon to delist its common shares from the Toronto Stock Exchange (the “TSX”), to submit an application for it to cease to be a reporting issuer, and to otherwise terminate its public company reporting requirements as soon as possible thereafter.
About CloudMD Software & Services
CloudMD is transforming the delivery of healthcare using technology and by providing a patient-centric approach, with an emphasis on continuity of care. By leveraging healthcare technology, the Company is building one, connected platform that addresses all points of a patient’s healthcare journey and provides better access to care and improved outcomes. Through CloudMD’s proprietary technology, the Company delivers quality healthcare through a holistic offering including hybrid primary care clinics, specialist care, telemedicine, mental health support, healthcare navigation, educational resources, and artificial intelligence (AI). CloudMD’s business is separated into three main divisions: Clinics and Pharmacies, Digital Solution and Enterprise Health Solutions, the Company’s fastest growing division. CloudMD’s Enterprise Health Solutions Division has built a leading employer healthcare solutions, including its Comprehensive Integrated Health Services Platform, which offers one comprehensive, digitally connected platform for educational institutions, corporations, insurers, and advisors to better manage the health and wellness of their students, employees, and customers.
CloudMD currently services a combined ecosystem of over 7,000 psychiatrists, approximately 4,500 therapists and counsellors, approximately 4,000 psychologists, over 22,000 family physicians, over 34,000 medical specialists, over 1,500 allied health professionals, over 500 clinics, and over 5 million individuals across North America. For more information visit: https://investors.cloudmd.ca.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD"
Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
VP, Investor Relations
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release contains “forward-looking statements” and “forward‐looking information” within the meaning of Canadian securities laws. Forward-looking statements in this press release include, but are not limited to, statements with respect to: the impact and benefits of the Arrangement, including that it will accelerate CloudMD’s U.S. expansion and improve its organic growth, as well as potential cost savings and synergies; CloudMD’s growth and transformation; and the timing for delisting of the MindBeacon shares from the TSX and ceasing to be a reporting issuer. These statements are based upon information currently available to CloudMD. All information that is not clearly historical in nature may constitute forward‐looking statements. In some cases, forward‐looking statements may be identified by the use of terms such as “forecast”, “assumption” and other similar expressions or future or conditional terms such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and “should”. Forward-looking statements contained in this press release are based on certain factors and assumptions made by management of CloudMD based on their current expectations, estimates, projections, assumptions and beliefs regarding their respective businesses and CloudMD does not provide any assurance that actual results will meet management’s expectations. While they consider these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect. Such forward‐looking statements are not guarantees of future events or performance and by their nature involve known and unknown risks, uncertainties and other factors, including those risks described in the respective Management’s Discussion and Analysis and Annual Information Form of CloudMD (each of which have been filed under its issuer profile on SEDAR and can be accessed at www.sedar.com), that may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward‐looking statements. Although CloudMD has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward‐looking statements, other factors may cause actions, events or results to be different than anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such forward‐looking statements. Accordingly, readers should not place undue reliance on forward‐looking information. CloudMD does not undertake to update any forward-looking information, whether as a result of new information or future events or otherwise, except as may be required by applicable securities laws.
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