Two Canadian behavioral health providers are now under one roof, as CloudMD Software Services Inc. has entered into an agreement to purchase MindBeacon Holdings Inc. for $116 million in cash and stock.
The deal was jointly announced by both companies on Monday.
Based in Vancouver, CloudMD is a behavioral health management and care platform that uses various professionals to provide services — among them being over 7,000 psychiatrists, around 4,000 psychologists, as well as approximately 4,500 therapists and counselors. More than 5 million individuals are currently served via CloudMD, making it one of the largest employee assistance programs in North America.
CloudMD trades on the Toronto Stock Exchange.
“By uniting traditionally siloed care, we are able to better leverage data to inform and provide improved patient outcomes,” Dr. Essam Hamza, who is CloudMD’s CEO, said in a press release announcing the deal. “As a doctor, I’m heartened by the fact that we are realizing one of CloudMD’s founding principals of have [sic] a full tech-enabled patient-centric ecosystem that is already demonstrating measurable improved outcomes for patients.”
Founded in 2016, Toronto-based MindBeacon provides offerings that include self-guided psychoeducational and wellness content, peer-to-peer support, therapist-guided programs and live therapy sessions. The platform is offered by various employers, payers and government entities.
MindBeacon bills itself as one of the first commercially available platforms in Canada to have offered internet-based cognitive behavioral therapy (iCBT). The company has been trading on TSX Venture, which is affiliated with the Toronto Stock Exchange.
“MindBeacon’s proven effectiveness in leveraging technology, data science and personalized, multi-modal treatment to improve mental health outcomes has set us apart,” MindBeacon CEO Dan Clark said in the press release. “Now, combined with CloudMD’s, end-to-end, whole-person care, our integrated solutions are truly unique and world-class. I’m excited about our future together and believe CloudMD is the ideal partner for our collective patients, customers and shareholders.”
MindBeacon recently established a presence in the U.S. market when it acquired Las Vegas-based Harmony Healthcare LLC, which is a provider of mental health and addiction treatment to children, adolescents and adults. The deal officially closed November 1.
CloudMD had already made a significant deal for a Canadian provider in April when it bought mental health and wellness solutions company Aspiria for $3 million.
“We continue to rapidly execute on our product roadmap through strategic acquisitions to build a leading North American healthcare and wellness offering,” Hamza added in the press release. “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.”
The newly-combined company will have a network of 5,500 corporate clients, according to the joint press release. The deal’s $116 million price tag represents a 49% premium of MindBeacon’s common shares, based on its seven-day volume weighted average stock price that was recorded on November 12. Once the deal closes, CloudMD is expected to have over $60 million of cash on hand.
The board of directors of both CloudMD and MindBeacon have unanimously approved the transaction. The purchase is expected to close after MindBeacon’s planned shareholder meeting for January.