Shares of WELL Health Technologies Corp (WELL) gained almost 10% on Monday after the omni-channel digital health company announced it will buy MyHealth Partners Inc. MyHealth is one of the largest specialty health care providers in Canada with a network of 48 diagnostic centers across Ontario.
WELL will pay C$206 million for MyHealth, plus a future conditional earnout of up to C$60 million. The acquisition will be paid with a combination of shares and debt.
The deal creates the largest non-governmental owner-operator of outpatient medical clinics in the country with 74 clinics combined and expands WELL’s footprint in the growing telehealth area. About 75% of MyHealth’s consultations are done via telehealth.
WELL Health Chairman and CEO Hamed Shahbazi said, “Once completed, WELL will be the largest and most capable non-governmental owner-operator of outpatient medical clinics in Canada. WELL will have meaningful capabilities across primary and secondary care along with robust diagnostic facilities and capabilities. MyHealth is a tech enabled and forward-thinking network delivering roughly three quarters of its medical consultations via telehealth. To our knowledge, this will position WELL as the leading multi-disciplinary provider of telehealth services in Canada due to the breadth and depth of primary and secondary healthcare service offerings including a substantial telecardiology and teleradiology program.”
Upon closing, this acquisition will generate approximately C$400 million in revenue and C$100 million in EBITDA annually. (See WELL Health Technologies Corp stock analysis on TipRanks)
Last month, Laurentian Bank analyst Nick Agostino reiterated a Buy rating on the stock with a C$12.50 price target. This implies 58.63% upside potential.
Agostino stated, “In-line-to-better Q1 results alongside a positive outlook demonstrate to us WELL’s operational expertise in meeting/exceeding expectations. The company’s M&A plans also remain unhinged, which we believe speaks to the clear visibility and direction management has for the company.”
Overall, the stock scores a Strong Buy consensus rating based on 10 Buys. The WELL average analyst price target of C$11.28 implies 43% upside potential to current levels. Shares have gained approximately 12% over the past month.
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