HEALWELL AI Closes $30M Convertible Debt Tranche, Bolstering Growth and Acquisition Pipeline

HEALWELL AI Inc. (TSX: AIDX), a leading healthcare technology company focused on AI and data science for preventative care, has successfully closed the $30 million convertible debt tranche of its upsized bought deal financing. This transaction, along with the previously completed $25.5 million equity tranche, brings the total funding to $55 million. The additional capital will be used to fund the acquisition of New Zealand-based Orion Health, a strategic move that will enhance HEALWELL's growth and development in the AI-enabled healthcare technologies sector.

The acquisition of Orion Health, a global leader in data interoperability and healthcare navigation products and services, is expected to be a transformative milestone for HEALWELL. The final price is NZ$200 million/CA$165 million (US$115 million) for 100% of Orion's private shares. CA$86 million will be paid in cash, with the balance paid in HEALWELL stock plus CA$20.5 million in a 3-year performance-based arrangement. Closing is anticipated to be in April 2025, after Orion divests itself of non-strategic assets and the usual approvals by shareholders, regulators, and the Toronto Stock Exchange.

Orion Health's products, including Orchestral, Amadeus, and Virtuoso, are data exchange, patient record, and analytics platforms that benefit clinicians and patients. Their largest customers are in Canada, Australia, and New Zealand, plus the NHS in the UK, giving HEALWELL AI an international footprint. HEALWELL AI is based in Toronto and is an artificial intelligence company focused on preventative care through the early identification and detection of disease. The release announcing the transaction highlights the complexity of the funding (dare we say leveraged?).

HEALWELL has raised $47.6 million in funding over six rounds, and it trades in the vicinity of CA$2.00, giving it a valuation of CA$354 million. The upsized bought deal financing reflects the market's confidence in HEALWELL's growth potential, driven by several factors:

1. Strategic Acquisitions: The acquisition of Orion Health significantly expands HEALWELL's footprint and customer base, providing a substantial multi-jurisdictional platform to deliver its best-in-class AI-driven solutions.
2. Revenue Growth: HEALWELL achieved record quarterly revenue from continuing operations of $13.7 million in Q3-2024, a 738% increase from the previous year and a 153% increase from the previous quarter. This growth is attributable to the commercialization of its AI and data science business units and the recent acquisitions of BioPharma and VeroSource.
3. Strong Acquisition Pipeline: HEALWELL has a robust acquisition pipeline, which strategically positions the company for substantial growth. Management expects to make further M&A announcements by year-end, which would accelerate the company's annualized revenue run-rate to a figure approaching $100 million and put the company on track to achieve profitability on an Adjusted EBITDA basis in 2025.
4. Accelerating Commercialization: HEALWELL is successfully accelerating the commercialization of its AI-enabled patient identification solutions across both public and private sectors. The company has secured 27 Master Services Agreements (MSAs) with pharmaceutical or life sciences partners, of which it has generated revenue from 23 partners, including 7 of the top 10 pharmaceutical companies in the world.

The upsized bought deal financing, including the $30 million convertible debenture tranche, demonstrates the market's confidence in HEALWELL's growth potential. The acquisition of Orion Health, along with the additional funding, will enable HEALWELL to expand its reach, enhance its offerings, and solidify its position as a leader in the AI-enabled healthcare technologies sector. As HEALWELL continues to execute on its strategic vision, investors can expect to see further growth and value creation from the company.