TORONTO, Feb. 26, 2019 (GLOBE NEWSWIRE) -- VITALHUB CORP. (TSXV: VHI) (the “Company” or “VitalHub”), is pleased to announce that today it has entered into an arm’s length agreement (the “Agreement”) to acquire substantially all of the assets of (the “Acquisition”) of The Oak Group, Inc. (the “Oak Group”), used in conducting its business, and all of the issued and outstanding share capital in the Oak Group’s wholly-owned subsidiary, The Oakgroup (UK) Limited (the “UK Subsidiary”). The purchase price for the Acquisition is to be satisfied by a combination of cash and common shares of VitalHub (“Common Shares”).
The Oak Group is a software and service provider of its propriety ‘Making Care Appropriate for Patients’ (“MCAP”) System. Twenty-two hospital groups use MCAP daily across the United Kingdom and in the Middle East representing over 10,000 hospital beds. Oak Group completed 200 patient flow performance reviews across five different countries using MCAP. At end of January 2019, the Oak Group had trailing 12-month revenues of $847,000 of which $751,000 is recurring in nature and represents a gross margin to Oak Group of 74%.
Dan Matlow, Chief Executive Officer of VitalHub said “the acquisition of the Oak Group and the MCAP (defined below) clinical criteria gives VitalHub an industry proven solution that has the potential to grow organically on an international scale. Using the combination of artificial intelligence (“AI”) and proven evidence-based clinical guidelines to determine the appropriate care setting of a patient solves a systemic patient-flow issue for all healthcare providers. Many members of the VitalHub team have experience in the patient-flow market and look forward to the re-entry into this market.”
“We believe our proven clinical criteria and AI software solution is unique to market and has proven itself so across five different countries. Combining forces with VitalHub’s ability to commercialize what he has created will take the product to new levels,” said Dr. David Maltz, one of the Oak Group founders.
The purchase price for the Acquisition is $1,640,000, which reflects certain estimated Net-Asset-Value calculations completed on the date immediately preceding the closing of the Acquisition (the “Closing”) and is subject to other customary post-closing adjustments. The purchase price is to be satisfied by the delivery on Closing of (i) cash in the amount of $751,000, less $207,000 to be held in escrow for a period of six (6) months from Closing, and (ii) 4,032,682 Common Shares (the “Consideration Shares”), at a price per Common Share equal to $0.22, representing a value of $887,190.12 to the Oak Group.
Twenty percent (20%) of the Consideration Shares are released to the Oak Group on closing of the Acquisition with the remaining to be held in escrow and released to the Oak Group in four (4) equal semi-annual installments over a 24 month period following closing.
The Company currently has 155,684,979 Common Shares issued and outstanding. Upon delivery of the Consideration Shares, the Company will have a total 159,717,661 issued and outstanding Common Shares.
VitalHub anticipates that the Acquisition will close on or about March 15, 2019 and is subject to customary closing conditions. The Acquisition is an arm’s length transaction for which no finder’s fees were paid nor does it represent a change of control.
About The Oak Group, Inc. and The Oakgroup (UK) Limited.
The Oak Group is a software and service provider of its propriety ‘Making Care Appropriate for Patients’ (“MCAP”) System. MCAP is a clinically-based set of criteria combined with a software data-gathering and reporting system for use in the medical, surgical, mental health and substance use disorder care settings. The MCAP System has a particular strength in post-acute settings of care. It is used to place and identify patients for admission or continued stay at the least intensive and most appropriate level of care.
MCAP can be used in an audit fashion to understand clinical inefficiencies in patient flow and as a basis to improve patient flow in real time. MCAP identifies patients that are clinically suitable for discharge or non-admission.
MCAP is a decision support product that is based on an objective analysis of the individual patient care service requirements and has been deployed in the US, U.K., Netherlands, Singapore, Qatar and Australia.
The MCAP criteria challenges only where the patient can be treated, not the clinician’s treatment plan or diagnosis. Thus, MCAP is well accepted by clinicians.
The Oak Group ranked first (based on combined quality & value scores) on the NHS England framework and is licensed on more U.K. healthcare beds than any other product of its class.
VitalHub develops and supports mission-critical healthcare information systems in the Mental Health (Child, Youth and Adult), Long Term Care, Community Health Service, Home Health and Hospital sectors. VitalHub technologies include Blockchain, Mobile, and Web-Based Assessment and EHR solutions.
VitalHub's aim is to create high-value, secured solutions enabling interoperability among existing health data systems. VitalHub is primarily focused on working with organizations in the Mental Health, Acute and Long-Term Care space, to further extend organization's applications across the continuum of care, powered by the security, efficiency, and trust of Blockchain technology.
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 200+ clients across North America. VitalHub is based in Toronto, Canada, with an offshore development hub in Sri Lanka. The Company is publicly traded on the TSX Venture Exchange under the symbol "VHI".
The TSX Venture Exchange has in no way passed upon the merits of the transactions and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Chief Executive Officer, Director
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
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 disclosure about the terms of the Acquisition.
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 Oak Group 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 Oak Group to complete the Acquisition on the terms disclosed in this news release, or at all; 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.