CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF,
Frankfurt: 6PH) (“
CloudMD”) and MindBeacon
Holdings Inc. (TSX:MBCN) (“MindBeacon”), jointly announce they have
entered into a definitive arrangement agreement (the “Arrangement
Agreement”) under which CloudMD will acquire all of MindBeacon’s
issued and outstanding common shares for a combination of cash and
shares valued at approximately $116 million. Under the terms of the
Arrangement Agreement, each common share of MindBeacon will be
exchanged for $1.22 of cash and 2.285 common shares of CloudMD (the
“Exchange Ratio”). The implied offer price of $4.78 and premium of
49% is based on the 7-day volume weighted average price (“VWAP”) of
the common shares of MindBeacon as of November 12, 2021.
MindBeacon is a leading digital mental
healthcare platform that provides a continuum of care, focusing on
iCBT, which is an effective therapy provided through a computer or
a mobile device. iCBT has become a fast-growing intervention
channel compared to conventional psychotherapy. MindBeacon’s
platform provides a cost-effective, stigma-reducing avenue to
deliver mental health therapy that complements CloudMD’s holistic,
integrated offering. MindBeacon has established relationships
across a broad spectrum of B2C and B2B distribution channels,
including healthcare providers, employers and governments.
MindBeacon delivers positive outcomes, with 82% of iCBT clients
reporting self-improvement in mental health, and 67% reporting
clinically significant improvement.
The addition of MindBeacon to CloudMD is
expected to be immediately synergistic for a number of key
reasons:
- Combined digital health platform
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.
- MindBeacon’s mental health services
will be integrated into CloudMD’s Comprehensive Integrated Health
Services Platform, which is expected to amplify the reach and
expand the breadth of interactive technologies and tool sets within
behavioural health to support clients with longitudinal
multi-dimensional care, and data interoperability is expected to
provide additional 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.
- Drives U.S. expansion potential
through additional capabilities, modalities, cross selling
synergies and MindBeacon’s recent acquisition of a U.S.-based
mental health provider.
- Leverage CloudMD’s Digital Health
Services division and network of over 20,000 regulated healthcare
professionals to promote MindBeacon’s “Beacon in a Box” white label
iCBT SaaS offering.
- On a consolidated basis, CloudMD
expected to have an annualized revenue run rate of $185 million and
gross margin of approximately 35%.
- Identified immediate cost synergies
exceeding $2 million.
“We continue to rapidly execute on our product
roadmap through strategic acquisitions to build a leading North
American healthcare and wellness offering. MindBeacon’s mental
health services and iCBT platform adds another important capability
to our robust healthcare ecosystem and further positions us with a
leading, clinically-validated mental health solution,” said
Dr. Essam Hamza, CEO of CloudMD. “Our proprietary,
integrated end-to-end healthcare offering focuses on whole-person
care that addresses the comorbidities between mental and physical
care. By uniting traditionally siloed care, we are able to better
leverage data to inform and provide improved patient outcomes. As a
doctor, I’m heartened by the fact that we are realizing one of
CloudMD’s founding principals of have a full tech-enabled
patient-centric ecosystem that is already demonstrating measurable
improved outcomes for patients.”
Karen Adams, President of
CloudMD further commented, “Mental health
and the variety of treatments available represent a large market
and access to care is a global concern. It is widely
recognized that obtaining assessment and coordinated care supports
access to care. CloudMD has developed a comprehensive health and
wellness platform focused on health outcomes that provides access
to treatment options from subclinical to clinical mental health
needs and acquiring a leading iCBT platform helps provide a
spectrum of treatment options. MindBeacon’s iCBT is synergistic to
our patented, Comprehensive Integrated Health Services Platform and
our EFAP HumanaCare program that is available throughout North
America. This will give users the ability to utilize iCBT, will
encourage engagement by reducing stigma based on the discreet
nature of iCBT and ultimately will create a more efficient,
valuable solution for patients, providers, payors, and
governments.”
“The need for mental health treatment is
accelerating daily. Further, its impact on physical health and
chronic conditions is also well known. Unfortunately, traditional
methods of care are ineffective due to restrictive access,
exorbitant costs, and ingrained stigma. Governments and employers
are looking for an end-to-end solution that treats the whole
person,” said Dan Clark, CEO of MindBeacon.
“MindBeacon’s proven effectiveness in leveraging technology, data
science and personalized, multi-modal treatment to improve mental
health outcomes has set us apart. Now, combined with CloudMD’s,
end-to-end, whole-person care, our integrated solutions are truly
unique and world-class. I’m excited about our future together and
believe CloudMD is the ideal partner for our collective patients,
customers and shareholders.”
Terms of the Transaction
CloudMD will acquire 100% of the issued and
outstanding common shares of MindBeacon, including its cash on hand
of $53.9 million as at September 30, 2021. The total transaction
consideration is comprised of approximately $29.5 million in cash
and 55.5 million common shares of CloudMD. Under the terms of the
Arrangement Agreement, each common share of MindBeacon will be
exchanged for $1.22 of cash plus 2.285 common shares of CloudMD.
Based on the 7-day VWAP of the common shares of CloudMD as at
November 12, 2021, the implied purchase price is approximately $116
million or $4.78 per share. The offer price represents a premium of
49% to MindBeacon’s 7-day VWAP as at November 12, 2021.
The transaction will be carried out by way of a
court-approved plan of arrangement under the Canada Business
Corporations Act. On completion of the transaction, shareholders of
MindBeacon will hold approximately 18.8% of pro forma CloudMD.
Completion of the transaction is subject to a
number of customary conditions, including approval by at least
two-thirds of the votes cast at a special meeting of MindBeacon
shareholders. In addition to shareholder and court approvals, the
transaction is also subject to the satisfaction of certain other
closing conditions customary in transactions of this nature,
including TSX Venture Exchange approval. The transaction is not
subject to any financing condition. The Arrangement Agreement
contains customary provisions, including non-solicitation,
“fiduciary out” and “right to match” provisions, as well as a $4.1
million termination fee payable to CloudMD under certain
circumstances. The Arrangement Agreement, which describes the full
particulars of the transaction, will be made available on SEDAR
under the issuer profiles of CloudMD and MindBeacon at
www.sedar.com.
TD Securities Inc. has provided an opinion to
the Board of Directors of MindBeacon to the effect that, as of the
date thereof, and based upon and subject to the assumptions,
limitations and qualifications set out in such opinion, the
consideration to be received by MindBeacon shareholders under the
transaction is fair, from a financial point of view, to such
shareholders.
The transaction has been unanimously approved by
the Boards of Directors of both companies. MindBeacon’s Board of
Directors unanimously recommends that MindBeacon shareholders vote
in favour of the transaction.
The directors, officers and certain shareholders
of MindBeacon, collectively holding approximately 28% of its issued
and outstanding common shares, have entered into voting support
agreements under which they have agreed to support and vote in
favour of the transaction.
Echelon Capital Markets is acting as an
exclusive financial advisor to CloudMD in connection with the
transaction. Cassels Brock & Blackwell LLP is acting as a legal
advisor to CloudMD. TD Securities Inc. is acting as a financial
advisor to MindBeacon, and Credit Suisse is acting as a strategic
advisor to MindBeacon, each in connection with the transaction.
Osler, Hoskin & Harcourt LLP is acting as a legal advisor to
MindBeacon.
Full details of the transaction will be included
in the MindBeacon information circular, which is expected to be
mailed to shareholders and made available on SEDAR under the issuer
profile of MindBeacon at www.sedar.com in due course. The
shareholder meeting is expected to be held in January 2022 and the
transaction is expected to close shortly thereafter.
CloudMD Acquisition of MindBeacon Conference
Call
Investors are invited to participate in a live
webinar with CloudMD and MindBeacon’s management to discuss the
acquisition.
CONFERENCE CALL DETAILS |
|
DATE: |
Monday, November 15, 2021 |
TIME: |
8:30 a.m. Eastern Time |
DIAL-IN NUMBER: |
North American Toll Free: 888-390-0605, Toronto:
416-764-8609 |
WEBCAST LINK: |
https://produceredition.webcasts.com/starthere.jsp?ei=1513071&tp_key=f350454138 |
TAPED REPLAY: |
Dial-In Number: 888-390-0541, Replay Code: 373317 # |
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 Enterprise Health Solutions
Division includes the leading Student Assistance Program and one of
the top 4 Employee Assistance Programs in Canada and 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.
About MindBeacon Holdings
Inc.
MindBeacon provides a continuum of mental
healthcare that includes self-guided psychoeducational and wellness
content, Peer-to-Peer Support, Therapist Guided Programs and Live
Therapy Sessions all offered virtually through its secure and
private platform. As one of the first commercially available,
digitally-native platforms to offer therapist-assisted
internet-based Cognitive Behavioural Therapy in Canada,
MindBeacon's professional service is designed around end users –
their health, their way. Working with employers, insurance carriers
and government ministries, MindBeacon offers services that are
accessible, available, affordable and, most importantly, proven to
be effective. MindBeacon is changing the therapy landscape by
making professional care available to every person, no matter when,
where and how they choose to access it.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD"Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
Julia Becker VP, Investor
Relationsjulia@cloudmd.ca(604)785-0850
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.
FORWARD-LOOKING STATEMENTS
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 transaction, the mailing of the
information circular, anticipated timing for completion of the
transaction and receiving the required regulatory, court and
shareholder approvals. These statements are based upon information
currently available to CloudMD and MindBeacon. 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 and MindBeacon based on their current expectations,
estimates, projections, assumptions and beliefs regarding their
respective businesses and neither CloudMD nor MindBeacon provides
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 and
MindBeacon (each of which have been filed under the respective
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 and MindBeacon have 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 and MindBeacon do 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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