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CloudMD Announces $55 Million Financing, Company to Acquire VisionPros, a Rapidly Growing Digital Eyecare Platform
Wednesday, February 17, 2021Company Profile | Follow Company
Victoria, BC, February 17, 2021--(T-Net)--CloudMD Software & Services Inc. (TSXV: DOC), a telemedicine company, announced that it has entered into an agreement with Canaccord Genuity Corp. Beacon Securities Limited and Echelon Wealth Partners Inc, on behalf of a syndicate of Underwriters.
The Underwriters have agreed to purchase, on a bought deal basis pursuant to the filing of a short form prospectus, an aggregate of 20,400,000 common shares at a price of $2.70 per Share for aggregate gross proceeds of approximately $55 million ($50M to company, and $5M to major shareholders).
The Company has granted the Underwriter an option to purchase up to an additional 3,060,000 shares at a price of $2.70 per Share, exercisable at any time, for a period of 30 days after and including the Closing Date, which would result in additional proceeds of $8.3 million.
CloudMD intends to use the net proceeds of the Offering for strategic M&A activities, working capital and general corporate purposes.
The company also announced that it has signed a binding term sheet to acquire VisionPros, a vertically integrated digital eyewear platform that has serviced almost 1 million unique customers across North America.
VisionPros conveniently delivers contact lenses and glasses right to their customer's door, anywhere in North America, at a fraction of the cost of traditional retail optical stores.
The highly scalable business model includes a rapidly growing, high margin e-commerce platform, subscription business and innovative suite of digital vision care tools. VisionPros offers a unique subscription offering, with flexible monthly billing options, as well as some of the lowest prices in North America. The multi-disciplinary platform also includes a brick-and-mortar clinic, online/in-person dispensary and a lens laboratory that manufactures and distributes lenses to eyecare partners for their own affordable KIND eyewear line.
VisionPros was founded by Dr. Jessy Manhas and is led by a team of eye doctors committed to providing patient-focused vision care, and empowering practitioners through its disruptive tele-optometry technology.
VisionPros' CEO, Dr. Steven Lee, is a pioneer of the online vision tests in the market and developed the first online vision test platform which remains the current standard in North America.
Subsequently, Dr. Lee developed, patented and is launching a new best-in-class, advanced technology that will deliver the safest online vision tests. This technology is designed to ensure a significantly higher level of accuracy and authentication of scripts.
VisionPros' digital platform shares many synergies with CloudMD's existing platform and provides significant opportunities for cross-selling and integration, according to the company.
The e-commerce platform gives CloudMD direct access to almost 1 million unique customer accounts and further secures the Company's footprint across North America. VisionPros' revenue for calendar year 2020 surpassed $22 million with an adjusted earnings before interest, tax depreciation and amortization ("Adjusted EBITDA") margin exceeding 10%.
Dr. Essam Hamza, CEO of CloudMD commented, "This is a significant acquisition for our business, which not only adds meaningful high margin revenue, but also provides us with an established e-commerce platform and almost 1 million customer accounts. VisionPros' disruptive tele-optometry platform aligns with our vision of providing patient-focused, whole-person care and will allow us to leverage a number of our technologies and integrate our solutions into one seamless patient experience."
Dr. Steven Lee, CEO of VisionPros commented, "We are extremely excited to partner with CloudMD and their physician led team. They share our commitment to providing a patient-centric approach that empowers physicians and engages patients. Our shared vision and combined resources are valuable for us as we look to undertake our aggressive growth strategy. There are obvious synergies across both health-tech platforms, and we look forward to leveraging those synergies to revolutionize the current system and build a North American leader in healthcare delivery."
Terms of Acquisition
In consideration for the purchase of 100% of the outstanding securities of VisionPros, CloudMD has agreed to pay shareholders of VisionPros (i) $30 million in cash, subject to a working capital adjustment; (ii) $30 million in common shares of the Company at a deemed price by calculating the volume-weighted average trading price of the Company's common shares for the 10 trading days prior to the execution of the binding term sheet; and (iii) a performance-based earnout of up to $40 million, which is payable in cash or common shares of the Company, at the discretion of CloudMD at the time of the earn out. The common shares will be subject to certain contractual restrictions on trading for a period of 18 months from the date of issuance. Additionally, the Company will pay a 5% finder's fee to an arm's length party in accordance with TSX Venture Exchange policy.
The acquisition is subject to customary closing conditions, including the execution of a definitive acquisition agreement and receipt of TSX Venture Exchange approval.
About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare by providing a patient centric approach, with an emphasis on continuity of care. The Company offers SAAS based health technology solutions to healthcare providers across North America and has developed proprietary technology that delivers quality healthcare through a holistic offering including hybrid primary care clinics, specialist care, telemedicine, mental health support, educational resources and artificial intelligence (AI). CloudMD currently services a combined ecosystem of over 500 clinics, almost 4000 licensed practitioners and 8 million patient charts across North America. For more information visit: investors.cloudmd.ca
About VisionPros
VisionPros is a Canadian-based online eyecare platform providing contact lenses and eyeglasses to customers across North America. The company sells contact lenses and glasses through a number of websites, including visionpros.com and contactlensescanada.com. VisionPros offers customers all of the leading brands of contact lenses and has its own line of eyeglasses and sunglasses called KIND Eyewear. A doctor-led company, VisionPros has developed and will soon launch an innovative, disruptive online vision test that uniquely ensures the accuracy and authentication of scripts unseen before with current existing online vision tests. For over 10 years, VisionPros has donated funding, equipment and medical personnel to bring the gift of sight to people in need in underdeveloped countries. For more information on VisionPros, please visit visionpros.com.
The Shares will be offered by way of a short form prospectus to be filed in all provinces of Canada except Quebec. The Offering is expected to close on March 9, 2021 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the TSX Venture Exchange ("TSXV") and the applicable securities regulatory authorities.
The Company will use best efforts to obtain the necessary approvals to list the Shares on the TSXV.
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