Online wellness company LifeSpeak is set to acquire Minnesota-based Wellbeats for up to $117.9 million CAD ($92.5 million USD).
An upfront payment of $80 million USD is payable in cash upon completion of the deal, with the remaining $12.5 million paid as an earnout on the achievement of predetermined 2022 milestones. The transaction is expected to close in March.
The acquisition is set to be funded through cash on hand as well as a $97.5 million credit facility that LifeSpeak is set to enter into with Scotiabank’s Technology Innovation and Banking Group. According to LifeSpeak, an additional $30 million from Scotiabank will be available through an accordion facility.
LifeSpeak is also funding the acquisition through subscription agreements with a group of investors led by Beedie Capital, with Scotia Capital Inc. and Roth Canada and ULC as agents. The investors intend to purchase 2.9 million common shares priced at $7.45 each, generating approximately $22 million in gross proceeds for LifeSpeak.
UPDATE 03/03/2022: LifeSpeak has since closed the acquisition as well as its credit facility deal and private placement. At the closing of the transaction, LifeSpeak’s net debt, including the net proceeds of the private placement, was approximately $70 million.
Founded in 2004, LifeSpeak offers digital mental health and well-being education software, attracting a customer base that includes Fortune 500 companies, government agencies, insurance providers, and other healthtech firms. FedEx Canada, Bell Canada, Lego Group, and the Royal Bank are some of them.
The addition of Wellbeats would bring over 400 clients, doubling LifeSpeak’s customer base to more than 800. At the time of its initial public offering, LifeSpeak maintained around 225 customers.
Wellbeats marks LifeSpeak’s fourth acquisition since it started trading on the Toronto Stock Exchange in July last year. Previously, it acquired caregiver support platform Torchlight, substance use disorder solutions provider ALAViDA, and Lift, which operates in the intersection of mental health and total well-being.
“A comprehensive suite of wellbeing solutions is paramount for organizations seeking to support their employees’ mental health and physical wellbeing,” said LifeSpeak. “Solutions supporting the inextricable link between mental health and physical wellbeing, effectively address employee total wellbeing and may serve to improve employee productivity, engagement, and retention.”
Michael Held, CEO of LifeSpeak said the Wellbeats acquisition introduces cross-selling opportunities and expands LifeSpeak’s growing lineup of digital health offerings.
Once the deal is closed, Jason Von Bank, president and CEO of Wellbeats, will assume the role of chief operating officer for Lifespeak.