Canada’s federal competition watchdog has obtained a court order to advance its probe into digital healthcare company Well Health’s recent acquisitions.
The Competition Bureau filed an application in November to investigate whether Well Health’s purchase of Healwell AI is likely to suppress competition for healthcare technology and services in Canada.
Well Health obtained a majority controlling interest in Healwell AI, just as Healwell closed a deal to buy New Zealand’s Orion Health.
In April, Well Health obtained a majority controlling interest in longtime Toronto-based partner Healwell AI, just as Healwell closed a deal to buy New Zealand’s Orion Health. At the time, Well Health CEO Hamed Shahbazi said the purchase would combine Well Health’s scale, Healwell’s AI expertise, and Orion’s knowledge of global health data systems to offer “cutting-edge” AI solutions for patients.
On Tuesday, a federal judge approved a court order that compels Well Health and Healwell to turn over records and information relevant to the investigation. The probe will focus on how Well Health’s takeover of Healwell affects choice and cost for users, and whether it creates barriers for new competitors to enter the digital healthcare space.
Trading on the Toronto Stock Exchange, Well Health has a broad portfolio of digital medical tools for healthcare providers, including diagnostics, record-keeping, patient portals, and artificial intelligence (AI) transcription tools. Toronto-based MCI Onehealth, now doing business as Healwell AI, went public in 2021 and has sought to develop AI software for digital healthcare.
In a statement to BetaKit on Wednesday, Well Health framed the court order as a “merger review” related to the Healwell acquisition. It said the bureau undertakes “a large number of merger reviews every year” and it’s looking forward to “working collaboratively” with the Bureau during its investigation.
A strategic focus on acquisitions
Well Health anticipated in April that the Healwell acquisition would contribute approximately $160 million CAD in revenue, with positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) over the following year, while the Orion Health acquisition would generate more than $100 million in revenue. Healwell posted quarterly revenue of $30.4 million in November, mainly due to the Orion acquisition.
Well Health’s fiscal Q3 earnings in November showed marked growth, driven by acquisitions. It posted a record $364.6 million in revenue, a 56-percent increase from the same period last year.
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Both Healwell and Well Health have recently made acquisitions a strategic focus. Healwell bought contract researcher BioPharma Services in June 2024, following that with the purchases of Intrahealth, AI documentation firm Mutuo, and patient-identification company Pentavere. Well Health has also bought a string of Canadian clinics, including 10 from Shoppers Drug Mart.
Healwell offloaded some parts of its business last quarter, including its Polyclinic Family Medicine and Specialty Clinics Group and its interest in Mutuo Health Solutions Inc. (which it sold to another Well Health subsidiary, Wellstar). Healwell said in August that it was a part of a plan to become a “pure-play” software-as-a-service (SaaS) and services company.
Feature image courtesy Well Health.