Toronto healthtech startup Adracare is set to be acquired by WELL Health Technologies in a $4.75 million CAD deal.
On January 4, WELL Health announced it had closed the acquisition of Adracare.
Adracare is the startup that followed from the former Toronto healthtech company Orbcare, which went bankrupt in 2019. Adracare was created late last year by the team behind OrbCare, having acquired a portion of Orbcare’s assets out of bankruptcy.
“Adracare is a complementary offering to our existing EMR and telehealth software revenue streams.”
Adracare provides clinic management, telehealth and practice management software to enterprise clients. Its customers operate in the areas of mental health, physiotherapy, nutrition, medicinal cannabis, audiology and speech pathology, and occupational health. Medical professionals use the management software to connect with patients virtually.
The acquisition of Adracare follows a long series of events that began in May of 2019, when OrbCare’s investor iGan Partners discovered Orbcare had misrepresented its revenue and financials to investors, and the startup subsequently filed for insolvency. The discovery was made after iGan partner Olivier Giner left the VC firm to join OrbCare. Giner later became CEO of Orbcare during the insolvency and now serves as CEO of Adracare.
After failing to find a different buyer as part of insolvency proceedings, Orbcare’s assets defaulted to iGan and were bought, in part, by Adracare.
Since it was incorporated in October of last year, Adaracare appears to have found success with a different focus than its predecessor company. While operational, OrbCare offered software looking to fix inefficiencies that exist within the healthcare system. Adracare, in comparison, offers a platform that helps medical practitioners manage virtual care, an apt offering given the shift in healthcare that took place this year due to COVID-19.
According to WELL, Adracare has clients in five countries, spanning Canada, the United States, the United Kingdom, Australia and New Zealand, and works with more than 6,800 healthcare practitioners. In the previous quarter, Adracare reportedly saw more than 93,000 appointments booked on its platform, supporting more than 179,000 patients.
As part of the acquisition deal, WELL is set to acquire all of the issued and outstanding shares of Adracare for $4.75 million in cash. The purchase price is notable when compared to the $1.2 million iGan was set to purchase Orbcare for during the bankruptcy proceedings. BetaKit was not able to confirm at the time how much Adracare paid for the Orbcare assets it purchased.
Adracare will continue to operate independently following the purchase, with WELL noting that Adracare is expected to be operated by its current CEO, Giner. A spokesperson for WELL confirmed to BetaKit Adracare will operate independently as a part of WELL’s Digital Health Apps Business unit. They also confirmed there will be no immediate changes to Adracre’s team or operations.
“We’re thrilled at the prospect of welcoming Olivier Giner, CEO of Adracare, and the rest of the talented Adracare team to the WELL family,” said Hamed Shahbazi, chairman and CEO of WELL. “Adracare is a complementary offering to our existing EMR and telehealth software revenue streams and broadens our technology solutions into markets that we currently don’t serve such as mental health and cannabis therapy.”
WELL also claimed that it expects Adracare to generate annualized revenue of close to $2 million CAD, “based on existing customer relationships and new contracts signed as projected over the next six months.” The company also stated its expectation that Adracare will be profitable on an Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) basis, though did not provide a timeline.
WELL, which is traded on the Toronto Stock Exchange either acquires or takes equity stakes in digital health, billing, and cybersecurity solutions. Some of the company’s notable deals include a $10.75 million acquisition of Kai Innovations, a $5.94 million strategic investment in Insig, and a $1 million seed investment in Phelix.ai. Earlier this month, WELL extended its reach into cybersecurity with the acquisition of Markham-based Source 44.
“We believe [Adracare’s] platform will be highly synergistic with WELL’s burgeoning EMR, telehealth and allied health businesses,” said Giner of the deal. “Our team is excited to work within the WELL ecosystem to develop a strong leadership position in the allied health practice management space for health and wellness practitioners.”
The closing of the transaction is subject to conditions and is expected to be completed by early Q1 2021.