Toronto-based healthcare software company VitalHub has acquired Kingston, Ont.-based Novari Health, a developer of referral management, central intake, and waitlist management software for healthcare organizations.
VitalHub expects acquisition to strengthen its “leading position” in the Canadian market.
The deal is worth up to $48.6 million CAD, consisting of a $35.8 million cash payment, the issuance of just over 730,000 VitalHub shares (worth approximately $7.8 million based on its pre-acquisition stock price), and up to $5 million in performance bonuses payable over two years.
In a statement, VitalHub called the referral management market “a key area of investment” for governments around the world due to increasing wait times and administrative burdens, adding that the Novari acquisition is expected to strengthen its “leading position” in the Canadian market.
“We have watched the success of Novari in the Canadian landscape for over a decade, and are honoured to welcome the team to the VitalHub platform,” VitalHub CEO Dan Matlow said in a statement. “We have solidified our leading position in the Canadian patient flow market, which we believe will be a long-term area of growth in the country’s digitalization journey.”
VitalHub also has eyes on the global market with this acquisition. The company said it will leverage its international footprint to rapidly expand Novari’s global reach, particularly in the United Kingdom, to establish itself as a leader in the referral management market.
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According to VitalHub, Novari had an annual recurring revenue of approximately $12 million prior to the acquisition, and was approaching breakeven on its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). VitalHub’s share price reacted positively to the deal, with its stock price on the Toronto Stock Exchange (TSX) jumping more than six percent as of market close on Monday.
Founded in 2015, VitalHub offers software for health and human service providers, including hospitals, regional health authorities, long-term care facilities, and community and social services providers. The company is an active acquirer, having purchased MedCurrent Corporation, Strata Health, and Induction Healthcare Group over the past year.
Founded in 2003, Novari Health’s platform provides referral management, surgical waitlist management, central intake, and care coordination services to help health systems lower wait times. In 2022, the Ontario government tapped Novari to help reduce the COVID-19 pandemic-fuelled surgery backlog in Eastern Ontario through its centralized waitlist platform.
Feature image courtesy National Cancer Institute via Unsplash.