CloudMD to acquire Canadian Medical Directory for C$1.95M

CloudMD Software & Services announced that it has entered into a Binding Term Sheet to acquire the Canadian Medical Directory. The robust, multi-layered database is genuinely unique as no other direct competitor has a SaaS platform that collects and vends the data in such a highly segmented, up-to-date way. The company said, "For 65 years, CMD has been trusted as the gold standard for information and is considered the only reliable resource for all provinces' medical professionals in a standard national format. CMD is Canada's leading source for profile and contact information on practicing physicians - both general practitioners and medical specialists- and nurse practitioners, across the country. With up-to-date information, it's a key reference tool used by clinics, hospitals, medical placement firms, pharmaceutical companies, and manufacturers and distributors of medical equipment and supplies. CMD has very high brand recall and recognition as a trusted source of information. Having accurate information on every medical practitioner across the country will be immediately valuable for CloudMD to cross sell, and optimize its suite of products. CloudMD will be able to integrate the CMD database into its Juno EMR, billing, virtual care and telehealth platforms, as well as iMD Health's leading educational resource databank. This acquisition will allow CloudMD to leverage the CMD brand, customer network and data, to power up and accelerate doctor acquisition and adoption. The acquisition will also enable CloudMD to use its suite of products and resources to continue building and growing CMD's robust database. With CloudMD's significant network, there is also an opportunity to broaden and expand CMD's current enterprise and institutional client base to drive further revenue. CloudMD plans to do this by cross-selling key CMD offerings including CMD's API for Insurers, which helps with Medical Insurance fraud detection, CMD's pending integration with Salesforce, HubSpot and MS Dynamics and CMD's newest integration with Clinia.com, who has integrated the CMD data into its next generation Canadian health resource directory." The acquisition of CMD will be immediately accretive to CloudMD's top line with the 100% SaaS and high margin revenue model. CMD generated approximately $450,000 in revenues with earnings before interest, taxes, depreciation and amortization margins exceeding 65%, resulting in an EBITDA of approximately $293,000 over the 12-month period ending September 30, 2020. The Company believes that there is significant opportunity to further optimize the revenue through integration and optimization In consideration for the purchase of 100% of the assets and business of CMD, CloudMD has agreed to pay aggregate consideration of C$1.95 million payable as follows: C$250,000 in cash; C$1.35 million in shares of the Company; anda performance-based earnout of C$350,000, which is payable in shares of the Company in annual issuances over a period of two years. All shares issued pursuant to the acquisition are issued at a deemed price of C$2.35 per share and are priced by calculating the 10-day volume-weighted average trading price of the Company's shares for the 10 trading days prior to the execution of the binding term sheet. The shares will be subject to certain contractual restrictions on trading for a period of 16 months from the date of issuance. The company also announces the granting of stock options to purchase an aggregate of 400,000 common shares of the Company at an exercise price of C$2.40 per share for a five-year term. The stock options were granted pursuant to the Company's Stock Option Plan and the policies of the TSX Venture Exchange, to an officer of the Company.