VitalHub Corp. to Acquire MedCurrent Corporation
Toronto, Ontario (July 30, 2024) VitalHub Corp. (TSX: VHI) (OTCQX: VHIBF) (the “Company” or “VitalHub”) is pleased to announce that it has signed a definitive agreement (the “Definitive Agreement”) to acquire MedCurrent Corporation and its subsidiaries (“MedCurrent”), by way of a court-approved plan of arrangement under the provisions of the Business Corporations Act (Ontario) (the “Transaction”).
MedCurrent is a physician-founded Clinical Decision Support (CDS) company focused on improving the quality of care and managing health system costs through its innovative and scalable solution, OrderWise. OrderWise enhances the clinical decision-making process within real-time to determine the appropriateness of a test using evidence-based guidelines and artificial intelligence (AI) integrated at the point of care. To date, the development of OrderWise has been primarily focused on improving appropriateness of orders for medical imaging tests. MedCurrent provides its solutions in over 80 customer installations in Canada, the United Kingdom, the United States of America, and Australia.
Hospital diagnostics, including medical imaging and laboratory testing, are critical components of healthcare delivery, accounting for a sizable portion of hospital expenditures1. In Canada alone, hospitals spend over $3 billion annually on medical imaging and $5.9 billion on laboratory testing2. Addressing inefficiencies and improving appropriateness in these areas is essential to reducing costs and enhancing patient outcomes. The Conference Board of Canada estimates that in 2022, average wait times were 67 days for a CT scan and 133 days for an MRI, significantly exceeding the acceptable 30-day standard3. These delays result in a net loss of $3.5 billion in GDP annually. Additionally, up to 30% of certain medical tests, procedures, and treatments are potentially unnecessary, according to the Canadian Institute for Health Information (CIHI)4. By integrating MedCurrent’s CDS solutions, VitalHub aims to reduce these inefficiencies, with a view to lowering healthcare costs and improving patient care.
VitalHub’s acquisition of MedCurrent aligns with VitalHub’s strategic vision to integrate cutting-edge technology solutions that streamline healthcare delivery. MedCurrent’s OrderWise platform, focused on optimizing diagnostic orders, will complement VitalHub’s existing Patient Flow software suite, providing a comprehensive solution to manage healthcare resources more effectively.
“This acquisition represents a significant step forward in our mission to enhance healthcare delivery through technology,” said Dan Matlow, CEO of VitalHub. “MedCurrent’s unique CDS software addresses a clear and critical need in the healthcare system. By integrating MedCurrent’s solutions with our existing offerings, we believe that we can significantly reduce unnecessary tests and procedures, ultimately lowering costs and improving patient care. We are excited about the potential to expand MedCurrent’s reach internationally and enhance our collective impact on global healthcare systems.”
“We are thrilled to join forces with VitalHub, a company that shares our commitment to improving healthcare through innovation. This partnership will allow us to accelerate the development and deployment of our solutions, reaching more healthcare providers and patients worldwide,” said Dr. Steve Herman, Founder and CEO of MedCurrent.
TRANSACTION CONDITIONS AND TIMING
VitalHub has agreed to acquire MedCurrent for total consideration of up to approximately C$34 million (assuming all earn-outs are achieved), including a cash payment of approximately C$12 million on closing (which amount is subject to customary working capital adjustments and other similar closing adjustments), and additional earn-out consideration up to a maximum of approximately C$21.875 million) based on annual performance over 36 months.
The Transaction will be effected by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) and will require the approval of at least 66⅔% of votes cast by MedCurrent shareholders at a special meeting of MedCurrent shareholders, the timing of which will be approved by the court. Upon completion of the Transaction, MedCurrent will become a wholly owned subsidiary of VitalHub.
Directors, officers, and certain other shareholders of MedCurrent, holding approximately 79.81% of the issued and outstanding common shares of MedCurrent, calculated on an as-converted to common share basis, have entered into voting support agreements pursuant to which they have agreed to vote their MedCurrent common shares in favour of the Transaction. In addition to the shareholder and court approval, the Transaction is subject to applicable regulatory approvals and third party consents and the satisfaction of certain other closing conditions customary in transactions of this nature. The Transaction is expected to close at the beginning of September, 2024.
VitalHub’s legal advisors for the Transaction are Torkin Manes LLP. Toronto-based Morrison Park Advisors and Rotterdam-based IMAP Netherlands served as MedCurrent’s exclusive financial advisors, while Norton Rose Fulbright Canada LLP acted as legal advisor.
Further details of the Transaction are set out in the Definitive Agreement that is available under Vitalhub’s corporate profile on SEDAR+ at www.sedarplus.ca.
ABOUT MEDCURRENT
Headquartered in Toronto, Canada, MedCurrent Corporation is focused on improving the quality of care and managing health system costs through its innovative Clinical Decision Support (CDS) platform, enabling real-time, evidence-based guidelines integrated at the point of care to improve health and healthcare delivery. MedCurrent serves 80+ organizations throughout Canada, the United Kingdom, the United States of America, and Australia with its 15 team members based in Canada and the United Kingdom.
ABOUT VITALHUB
Software for Health and Human Services providers designed to simplify the user experience and optimize outcomes.
VitalHub is a leading software company dedicated to empowering Health and Human Services providers. Our clients include hospitals, regional health authorities, mental health and addictions services providers for children and adults, long-term care facilities, home health agencies, correctional services, and community and social services providers.
VitalHub’s comprehensive suite of SaaS solutions include:
· Electronic Health Record (EHR), Case Management, Care Coordination, and Optimization
· Patient Flow, Operational Visibility, and Patient Journey Optimization
· Workforce Automation
The Company has a robust two-pronged growth strategy, targeting organic growth opportunities within its product suite, and pursuing an aggressive M&A plan. Currently VitalHub serves more than 1,000 clients across Canada, USA, UK, Australia, the Middle East, and Europe.
VitalHub is based in Toronto, Canada, with an offshore development hub in Sri Lanka. The VitalHub team comprises more than 400 team members globally. The Company is publicly traded on the Toronto Stock Exchange (TSX) under the symbol “VHI” and on the OTC Markets OTCQX Exchange under the symbol “VHIBF”.
CONTACT INFORMATION
VitalHub Corp.
Dan Matlow
Chief Executive Officer, Director
(416) 727-9061
CAUTIONARY STATEMENT
This news release contains “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking information generally refers to information about an issuer’s business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer’s prospective financial performance or financial position. The forward-looking information in this news release includes reference to disclosure about the terms of the Transaction, about MedCurrent, including its historical revenue and future recurring revenue, and about potential synergies among existing offerings in the issuer’s patient flow products as well as the potential for the international application of MedCurrent’s product offerings. VitalHub made certain material assumptions, including but not limited to: prevailing market conditions; general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the ability of VitalHub and MedCurrent to execute and achieve its business objectives, to develop the forward-looking information in this news release. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Actual results may vary from the forward-looking information in this news release due to certain material risk factors. These risk factors include, but are not limited to: adverse market conditions; the inability of VitalHub and MedCurrent to successfully integrate operations; reliance on key and qualified personnel; and regulatory and other risks associated with the medical and technology industries in general. The foregoing list of material risk factors and assumptions is not exhaustive. VitalHub assumes no obligation to update or revise the forward-looking information in this news release unless it is required to do so under Canadian securities legislation.
1. CD Howe Institute, Commentary No. 533, “What the Doctor Ordered: Improving the Use and Value of Laboratory Testing”.
2. Canadian Institute for Health Information, “Hospital Spending”, September 21, 2023.
3. Canadian Association of Radiologists, “Addressing the Medical Imaging Dilemma in Canada: Restoring Timely Access for Patients Post-Pandemic.”
4. Canadian Institute for Health Information, “Unnecessary Care in Canada”, April 2017.