On November 15, CloudMD Software & Services Inc. announced that it will acquire MindBeacon Holdings Inc. for C$116 million, or the equivalent of $92.4 million.
Based in Toronto, Canada and founded in 2016, MindBeacon is a leading digital mental healthcare platform that provides a continuum of care, focusing on iCBT (internet-based Cognitive Behavioral Therapy), which is an effective therapy provided through a computer or a mobile device. MindBeacon has established relationships across a broad spectrum of B2C and B2B distribution channels, including healthcare providers, employers and governments.
CloudMD, formed in 2013 and previously known as Premier Health Group, offers SAAS-based health technology solutions to medical clinics. With headquarters in Vancouver, Canada, CloudMD currently services a combined ecosystem of over 500 clinics, almost 4000 licensed practitioners and 8 million registered patients across North America.
The combined companies are expected to be one of North America’s largest digital health platforms, with broad continuum care of mild, moderate, acute and chronic physical and mental care with 5,500 corporate clients, over 5 million lives, and widespread government contacts. “MindBeacon’s mental health services and iCBT platform adds another important capability to our robust healthcare ecosystem and further positions us with a leading, clinically-validated mental health solution,” said CloudMD’s CEO, Dr. Essam Hamza.
This deal represents the rapid growth experienced in the demand for behavioral health care, which is anticipated to grow to $242 billion by 2027. The transaction also speaks to the growing intersection of behavioral health and eHealth as more and more clients are starting to rely on technology to receive their healthcare, especially regarding mental health.
With the acquisition of MindBeacon, CloudMD will have annualized revenues of approximately $185 million (a 19% increase from CloudMD’s current revenue run rate of $155 million), as well as an improved gross margin of 35%.
Echelon Capital Markets acted as an exclusive financial advisor and Cassels Brock & Blackwell LLP acted as a legal advisor to CloudMD. TD Securities Inc. acted as a financial advisor, Credit Suisse acted as a strategic advisor and Osler, Hoskin & Harcourt LLP is acted as a legal advisor to MindBeacon.
This is CloudMD’s second acquisition of 2021. It previously purchased Oncidium, a health management company, for $54.4 million, or the equivalent of C$68 million.
