The Doctor Care Anywhere Group PLC (ASX: DOC) share price is rising after it announced that it has entered the Australian market with an acquisition.
Doctor Care Anywhere is a UK based telehealth company. It is a doctor led company that provides a range of telehealth services through its proprietary platform.
Doctor Care Anywhere enters Australian market
The company announced that it has entered the Australian telehealth market with the acquisition of Australian based company GP2U Telehealth.
GP2U Telehealth provides telehealth GP services under the GP2U brand and virtual mental health services under the Psych2U brand. The Psych2U brand represents 78% of GP2U Telehealth’s total revenue and has a channel partnership with health insurer HCF.
Doctor Care Anywhere said that GP2U Telehealth grew unaudited gross revenue by 54.8% to $4.4 million for FY21. It grew consultations by psychiatrists, psychologists and GPs by 51.4% to 35,000 in FY21.
Management said that it sees significant opportunities to grow mental health and GP telehealth services in Australia, noting the growing mental health needs particularly in rural areas.
Doctor Care Anywhere CEO Dr Bayju Thakar said: “This acquisition represents another important milestone for Doctor Care Anywhere; giving us a platform on which to build our presence in the Australian market and further expand our international business.”
The financial details of the deal
Doctor Care Anywhere will acquire 100% of the shares in GP2U Telehealth for A$11 million, which is 2.5 times GP2U’s unaudited revenue for FY21.
Of the A$11 million, A$3.3 million will be funded by Doctor Care Anywhere’s existing cash reserves. The remaining $7.7 million to come from CDIs/new shares, with 10,555,173 CDIs issued to shareholders of GP2U at a price of $0.73 per CDI.
Doctor Care Anywhere noted that there are no material liabilities on GP2U Teleheath’s balance sheet.
Final thoughts on Doctor Care Anywhere and the share price
There seems to be good demand for digital health services with potential for lots of growth and Doctor Care Anywhere appears to be making moves to take advantage of that.
The Doctor Care Anywhere share price is up over 3% on the back of the news of the acquisition. The share price is down 14.5% since the December 2020 IPO.
With the trends that the pandemic has created and accelerated, I think Doctor Care Anywhere has stronger tailwinds than before COVID came along.
This could be one to watch if the trend of demand for digital health services continues beyond the new normal after COVID-19.
