This year we have seen deep-rooted shifts in how companies function across the board. Nearly every industry has needed to adapt and innovate to survive the wide reaching impacts of the pandemic. One of the most important sectors in this shift has been healthcare, which has not only needed to adapt but improve in response to rising health sector challenges. Companies such as WELL Health Technologies, providing digital-first systems for the sector, are thriving in a new, remote world.
We're taking a closer look at WELL to understand how this multi-channel digital health company has established itself at the forefront of the latest healthcare revolution. Founder Hamed Shahbhazi was the previous Founder and CEO of TIO Networks, which was acquired by PayPal for $304M in 2017. Shahbazi was motivated to start WELL after seeing a pressing need for digital innovation in the healthcare arena, as stated in an interview with Bloomberg earlier this year:
"I started the company because of the lack of modernization and digitization that existed in healthcare, which has lagged other sectors in terms of digitization, and of course no sector will evade digitization, so the idea was to really participate and contribute to those tailwinds."
WELL has found success both riding and driving those tail winds this year. Last week, the company announced record breaking first quarter earnings up 150% year over year, led by a software and services increase of 345%. This is in part thanks to WELL's aggressive and strategic set of acquisitions in recent months. In April, WELL announced its latest acquisition, CRH Medical. This landmark deal was valued at US$373 million, making it the largest WELL Health has completed so far. WELL Health expects the acquisition to boost its revenue and EBITDA significantly and analysts anticipate WELL is now approaching C$300M in revenues with over 25% EBITDA margins and 18% free cash flow. A vote of confidence in WELL's cash flow can be seen in the recent upsizing on it's line of credit with JP Morgan, the number one bank in the US in the vast healthcare sector. This is truly rapid growth, in an industry with high barriers to entry.
In the coming year, WELL has its sights set on the United States as it increases its market share and operations down South. WELL is the majority owner of Y-combinator graduate Circle Medical, a silicon valley based telehealth company which has created a full stack primary care ecosystem. The company's list of acquisitions has dramatically beefed up its US presence. CRH Medical has over 800 practitioners providing anaesthesia services to 73 ambulatory surgical centers in the US, and is on track to generate over US$150M in revenues and over US$40M in free cash flow before leverage and tax costs in 2021. Meanwhile, back on home turf, the company has already established itself as one of the leading Canadian health companies, as one of the top 3 providers of EMR services, a top 3 provider of telehealth services, and one of the largest owner/operators of medical clinics, combining to make WELL one of the most consequential companies in the healthcare space in Canada.
