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- Aspiria serves around 750 organizations with about 1 million students and employees.
- The move will make CloudMD the fourth largest Employee Assistance Program (EAP) platform in Canada.
- CloudMD will focus on providing integrated mental health solution.
Stock of digital healthcare technology company CloudMD Software & Services Inc. (TSXV: DOC) surged 12.6 per cent in intraday trading as the company announced that it has closed the acquisition of comprehensive mental health and wellness solutions provider Aspiria Corp.
The move will make CloudMD the fourth largest Employee Assistance Program (EAP) platform in Canada. The combined strength of the company will now comprise at least 7,500 psychologists and psychotherapists who will cover 3 million lives.
Aspiria's addition to CloudMD's Enterprise Health Solutions (EHS) division will likely contribute to its healthy gross margins. Apart from EAP, Aspiria also provides Student Assistance Program (SAP) and it serves around 750 organizations with about 1 million people and their families across the world.
After closing the acquisition, Karen Adams, Global Head of EHS division at CloudMD, said that with this acquisition the company has launched an integrated mental health support solution to support employers in giving access to their employees for addressing mental health issues.
CloudMD to focus on mental health solution
With the launch of the integrated mental health support solution, the company has indicated its focus area. This will ensure that the students and employees will not only get access to traditional EAP services but can also get services like Internet-based Cognitive Behavioural Therapy (iCBT) and Women's Mental Health among other solutions.
The integrated mental health solution will comprise of offerings such as Aspiria, HumanaCare and Snapclarity. People across North America will be able to access them via a digital mental health platform.
The company's EHS division is one of its kinds and offers a centralized and well-connected platform to people as part of their care benefit programs. Since January 2021, it has secured multi-year customer contracts worth C$ 5 million. CloudMD estimates that its EHS Division will witness a 20 per cent growth in annual Pro-forma revenue.
A look at the company’s stock and financials
The company has a market cap of C$ 429.5 million and holds a price-to-book ratio of 8.958. The scrips were priced at C$ 2.15 apiece at market close on April 6, down by 37.3 per cent against its 52-week high of C$ 3.43 and 298 per cent up from the 52-week low of C$ 0.54.
CloudMD made its debut on the TSXV in June last year. The stock grew about 236 per cent in nine months and 4.8 per cent in six months.
In Q3 2020, the gross profit was C$ 1.4 million, an increase of 41.6 per cent from the same comparable period of the previous year.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.