Vancouver-based digital healthcare company Well Health is exercising its call rights to gain a majority controlling interest in its long-time strategic partner Healwell AI.
The call rights are a result of Well Health’s October 2023 investment in Healwell, which gave Well Health the right to acquire more than 60 million voting shares of Healwell within three years, as well as converting all of its Healwell convertible debentures and interest accrued to purchase even more voting shares. Following the close of the call options today, Well Health expects to hold an approximate 37 percent economic interest, and an approximate 69 percent voting interest, in Healwell on a non-diluted basis.
The call options are closing in conjunction with Healwell’s $165-million CAD acquisition of New Zealand healthcare data management company Orion Health, which it agreed to this past December. It has since been securing financing to close the transaction.
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Healwell chairman Hamed Shahbazi, who is also the founder and CEO of Well Health, said in a December statement that the Orion acquisition will bring significant large enterprise customers and a new channel for the distribution of Healwell’s AI products and services
Well Health said that it is anticipating Healwell to contribute approximately $160 million in revenue with positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to its consolidated financial statements over the next 12 months. Meanwhile, the concurrent Orion Health acquisition is expected to generate more than $100 million CAD in revenue with “strong double digit Adjusted EBITDA margins.”
“By combining our scale and national footprint with HEALWELL’s expertise in AI and Orion’s experience in implementing global health information systems, we believe we are well-positioned to deliver cutting-edge AI-enabled solutions that will enhance patient care and drive innovation,” Shahbazi said in a statement.
Last week, Healwell reported that it had achieved record annual revenue in its fiscal 2024 financial report, raking in approximately $39 million, a 433 percent jump compared to fiscal 2023, though it reported an overall net loss exceeding $25 million on the year.
Meanwhile, Well Health had to delay the release of its annual financial statements this week due to the “accounting implications” of an investigation with its non-wholly own Delaware-based subsidiary Circle Medical. Well Health said that Circle Medical’s billing practices are being investigated by the United States Attorney’s Office, and that the impact of the investigator’s request for information is required to finalize its financial statement for the year.
Hong Kong-based billionaire and founder of deep tech venture capital firm Horizons Ventures, Solina Chau, increased her ownership stake in Well Health to 14.53 percent through an $81-million CAD private share purchase agreement this past October. The purchase followed a comprehensive earnings call earlier in the year, where Shahbazi revealed plans to spin out and publicly list Well’s software-as-a-service (SaaS) business segment.
Feature image courtesy Healwell AI via YouTube.