The pandemic has forced employers to act. “They realize that care benefits are essential to employees’ productivity and success at work. In fact, 57% of senior leaders told us that their organizations are assigning higher priority to care benefits to better support their employees in both work and life,” as reported by Harvard Business Review. That could be a major catalyst for companies such as CloudMD Software & Services Inc. (TSXV:DOC)(OTCQB:DOCRF), Teladoc Health (NYSE:TDOC), Amwell Corp. (NYSE:AMWL), Dialogue Health Technologies Inc. (TSX:CARE), and Morneau Shepell Inc. (TSX:MSI).
In addition, according to BBC, 88% of U.S. companies are now investing more in mental health. About 80% of U.S. companies are spending more on employee stress-management. Better, according to Wellable, “Telemedicine programs experienced one of the most significant increases in popularity of all wellness benefits. Eighty-seven percent of employers plan to invest more in the coming year—a full 25 percentage points higher than the previous year.”
Look at CloudMD Software & Services Inc., for example
CloudMD Software & Services Inc., a healthcare technology company revolutionizing the delivery of care, is excited to announce that it has signed a binding agreement to acquire Oncidium Inc. (“Oncidium”), one of Canada’s leading healthcare providers to employers. Oncidium has built a difficult-to-replicate ecosystem of over 500 clients, more than 1,000 health care providers and medical assessors, and its clients with over 2 million employees across the country.
The employer market vertical is the fastest growing area in healthcare and this acquisition makes CloudMD a Canadian leader in the space. Built on over 20 years of experience in the employer health market, Oncidium is one of Canada’s leading health management companies with clients from a number of Canada’s Fortune 500 Companies. Oncidium’s services focus on reducing occupational absence by delivering solutions that improve the health and wellness of employees. Oncidium’s services include solutions that support 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. Oncidium’s services are delivered virtually, on-demand and on-site through its network of over 1,000 healthcare professionals, assessors and medical centers nationally.
The acquisition of Oncidium aligns with CloudMD’s strategy of providing whole-person care and will fit into its connected healthcare platform. Oncidium’s solution will be a key component of the Company’s Enterprise Health Solutions (“EHS”) Division and will provide complementary services to the Company’s already established employer base. This will enable CloudMD to provide a comprehensive EHS solution to the combined network of over 5,500 clients and 5 million employees across North America. The addition of Oncidium will immediately be synergistic for a number of key reasons:
- Instantly accretive to CloudMD with LTM revenues of $37 million and Adjusted EBITDA margin exceeding 14% with current 4-month annualized revenue run rate in excess of $40 million
- On a consolidated basis, CloudMD will have an annualized revenue run rate in excess of $120 million, overall gross margin of 35% and achieve positive Adjusted EBITDA
- Drives revenue and margin expansion for the Enterprise Health Solutions division with annualized revenue run rate of $53 million, Adjusted EBITDA of +10% and a healthy gross margin of 40%
- Rapidly growing business in the fastest growing segment of the Canadian healthcare space
- Cross selling opportunities through a combined network of 5,500 loyal corporate clients and over 5 million lives
- Increases CloudMD’s capabilities to include additional employer health services
- Competitive advantage to industry peers with comprehensive platform, addressing whole-person healthcare through assessment, triage and support across mental health, specialist care, healthcare navigation, short-term and long-term support and educational resources
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. The Oncidium team has built an incredible healthcare offering and the company has become one of the leading health services provider to the employer marketplace. I am incredibly excited for our future growth as we continue building out our healthcare capabilities that now includes: brick-and-mortar clinics, allied care, virtual care, a leading mental health solution, direct-to-consumer offerings and a robust and expansive Enterprise Health Solutions division. We are uniquely positioned to deliver and drive shareholder value.”
Karen Adams, Chief Health Innovation Officer & Global Head of Enterprise Health Solutions added “We have already identified immediate synergies which will drive further revenue and margin growth and we will continue to unlock growth opportunities throughout the integration. This acquisition allows us to take the leadership position in the employer market with a fully-integrated product offering which addresses all aspects of employee health and wellness and ensures optimization of employer spend.”
Dr. Lu Barbuto, CEO of Oncidium commented, “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. With the CloudMD team, I look forward to continuing to develop, expand and deliver science based precision health solutions to Employers that will in turn improve the lives of Canadians.”
Other related developments from around the markets include:
Teladoc Health, the global leader in whole-person virtual care, reported strong financial results for the fourth quarter and full year ended December 31, 2020. “As virtual care shifted to become a consumer expectation in 2020, Teladoc Health not only met the rapidly growing demand, but we transformed our company to define a new category of whole-person virtual care,” said Jason Gorevic, chief executive officer of Teladoc Health. “By accelerating our mission to transform the health care experience, we exceeded our fourth-quarter and full-year 2020 expectations and see strong momentum across our global business in 2021 as the market embraces the breadth and depth of our unique capabilities.”
Amwell Corp., a national telehealth leader, announced strong financial results for the fourth quarter and full year ended December 31, 2020. “Our fourth quarter results were strong across all of our performance metrics, closing out a year of significant growth. Throughout 2020, the pandemic stressed the entire healthcare system and drove a rapid evolution in the way care is delivered from simple and convenient urgent care replacement service to a mission critical, digital care delivery infrastructure across the full continuum of care. This change is profound and irreversible in our opinion and we were thrilled to see our platform embraced by our clients’ providers across the community and used in ways that strengthens existing patient provider relationships. The Amwell platform was able to support overall care delivery in the new hybrid world by rapidly launching new modules and care points like Amwell Now, the Amwell Connect EHR module and the home and hospital enabled C500 Carepoint,” said Dr. Ido Schoenberg, Chairman and Co-CEO.
Dialogue Health Technologies Inc. “bought health care provider Optima Global Health, artificial intelligence-based triage tool DXA and German occupational health company ARGUMED Consulting Group GmbH in the last three years. The company has partnered with Canada Life Assurance Co., Beneva and Desjardins and counts National Bank of Canada, Lightspeed POS Inc., Ubisoft, Samsung, Sobeys and Sephora as customers, according to a prospectus Dialogue filed ahead of the public offering,” as reported by The Canadian Press.
Morneau Shepell Inc. reported its financial results for the full year 2020 and the fourth quarter ended December 31, 2020. For the full year in 2020, revenue grew 10.2 per cent, or $90.3 million, to $979.2 million, with adjusted EBITDA increasing by 9.6 per cent to $200.0 million. Adjusted EBITDA margins were essentially flat at 20.4 per cent for the year. “At a challenging time like no other, we delivered a solid year in 2020 that featured revenue and profitability growth, along with increases in organic revenue,” said Stephen Liptrap, President and Chief Executive Officer. “The ability of our people and systems to pivot to remote work quickly and productively was a key success factor, contributing to record client satisfaction and employee engagement levels. While in-person services were impacted in markets affected by lockdowns, there was a strong increase in demand for technology-enabled solutions across our core businesses, especially so in fast-growing wellbeing markets for digital health. Throughout the year, we strengthened our position as the global leader in the total wellbeing space and added 2.85 million people to our wellbeing platform.”
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