Healwell AI accelerates M&A strategy with acquisitions of VeroSource Solutions and BioPharma Services

Healwell AI
The deals, if successful, will have a combined value of over $36 million.

Toronto-based healthtech and artificial intelligence (AI) firm Healwell AI has entered into agreements to acquire two more companies: health data platform VeroSource Solutions and contract research organization BioPharma Services.

Healwell’s acquisition of VeroSource Solutions is expected to be valued at $24.5 million, according to a statement issued by Healwell. Healwell has also signed an agreement to acquire BioPharma Services from Think Research. As part of that deal, Healwell will pay $11.9 million in cash and shares. That deal also includes a three-year performance earnout of up to $2.5 million from Think Research.

Healwell said once both deals have closed, it expects its annualized revenue run rate to exceed $65 million.

Fredericton, N.B.-based VeroSource offers a software product that integrates health data from sources such as electronic medical records (EMRs), pharmacies, and hospital information systems into a single platform.VeroSource offers data services to both companies and provincial health systems like MyHealthNB in New Brunswick.

Toronto-based BioPharma helps pharmaceutical companies conduct bioequivalence trials—which ensure that two drugs work the same way in the body—and early-stage clinical trials. According to Healwell, the firm has completed over 2,200 trials with over 250 pharmaceutical companies to date. 

Healwell CEO Alexander Dobranowski said in a statement that the BioPharma deal is aimed at improving Healwell’s own clinical research capabilities, while allowing BioPharma to use Healwell’s data science expertise to improve its offerings. Following the acquisition, BioPharma will be able to include patient trials across all phases of drug development, he said.

RELATED: Fuelled by Well Health partnership, Healwell looks to apply AI to preventative care

In its own statement announcing the sale of BioPharma, Think Research said the deal is a “key component” of its strategy to refocus on its core software assets. The company acquired BioPharma in 2021, and was itself recently acquired by Beedie Capital. Prior to the latter deal, Think Research faced a series of “financial challenges,” which included its stock losing most of its value on the Toronto Stock Exchange (TSX) Venture Exchange and a breach of debt covenants.

Healwell claimed that once both transactions have closed, it expects its own annualized revenue run rate to exceed $65 million. Both deals are subject to approval from the TSX. 

UPDATE (07/02/2024): Healwell AI announced it closed both acquisitions on July 2, 2024.

Healwell’s two deals follow a period of significant change for the company. Under its former name MCI OneHealth, the firm previously operated a number of clinics as well as an innovation arm focused on developing software products aimed at increasing the rate of detection for chronic disease and improving overall clinical standards.

Last year, the firm decided to narrow its focus on AI and data science, divest its clinical business, and engage another Canadian healthtech company, Well Health, to recapitalize the remaining company. Since then, Healwell has focused on being a “capital allocator” at the intersection of AI and preventative healthcare, Dobranowski told BetaKit earlier this year.

The firm’s acquisition strategy is twofold: early-stage AI-focused companies, and more mature companies in the health software space that focus on areas like EMRs. Since its rebrand to Healwell in October 2023, the company has made several acquisitions, including Toronto-based Pentavere and Vancouver-based Intrahealth.

Feature image courtesy of Healwell AI.

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.

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