QHR to acquire Clinicare for $5
KELOWNA, B.C. – QHR Technologies
Inc. announced that it has signed a letter of intent to acquire up
to 100% of the shares in Clinicare Corporation, a privately held
Calgary-based Electronic Medical Records company. The purchase is
subject to TSX Venture Exchange approval, Clinicare shareholder
acceptance and to normal closing conditions, which is expected to be
completed by the end of November, 2009.
Clinicare’s Board of Directors have unanimously recommended QHR’s offer
to acquire their shares of the company and acceptance by the Clinicare
shareholders. QHR and Clinicare have entered into an Exclusivity &
Standstill Agreement that is effective immediately and until completion
of shareholder purchase agreements.
Once completed, QHR will merge the Clinicare operations with its EMR
division, Optimed Software Corporation, and intends to retain
Clinicare’s Calgary and Toronto offices.
Optimed will then be supporting over 3,000 physicians across Canada in
almost every province for its products, with over 2,000 physicians
utilizing EMR. QHR believes more Canadian physicians will be using
Optimed’s EMR than any other EMR solution and these physician clients
have the most extensive EMR database of patient information in Canada.
This acquisition once completed is expected to generate approximately
$3.25 million in recurring revenue in 2010, for a combined EMR division
with over $6 million in recurring revenue, and QHR’s consolidated
recurring revenue in excess of $10 million for 2010.
Clinicare Corporation, founded in 1984, has approximately 1,200
physicians on their EMR and Practice Management software in Canada and
the United States. Clinicare is well known in Canadian healthcare
circles as the EMR industry leader for the larger Canadian clinics. Many
of Clinicare’s physician clients were the early adopters of EMR systems
and the drivers behind the adoption of EMR across Canada.
Clinicare is one of four certified EMR vendors in Manitoba (along with
Optimed) and one of six full certification OntarioMD CMS version 3.0
vendors. Physicians who implement CMS 3.0 systems are eligible for part
of the $236M in physician funding program recently announced by
In announcing the acquisition, Mr. Al Hildebrandt, President and CEO of
QHR Technologies, said, “Clinicare and Optimed have been competing for the past six years in the EMR market.
Both companies have invested significant amounts in development to gain
market acceptance and provincial certification. Now those duplicate
development dollars can be turned into enhancing our marketing efforts
across the country and increasing levels of customer support. The level
of functionality that a Clinicare client would use in their EMR system
and guidance from many of Canada’s EMR pioneers will be an asset to
Optimed’s growing community”.
Internally, Optimed’s General Manager, Fred Chapman, already has a
strong relationship with most of the Clinicare customers from his former
roles with Clinicare from 1989 until 2005, most recently as COO and VP
Mr. Karim Kanji, President & CFO for Clinicare said that, “Clinicare’s
shareholders and Board of Directors wanted to ensure that the ongoing
operations of Clinicare were placed in the hands of people who
understood the EMR business, were able to immediately deliver more
current technology and would ensure that our clients’ extensive amount
of patient data would be completely transferred when the clients choose
to upgrade to Optimed’s product in the next 3-5 years. QHR’s overall
business operation goes beyond EMR, which allows Clinicare to join a
larger organization, thereby protecting our customers’ investments and
providing opportunities for our employees to continue servicing the
customers they have built relationships with.”
QHR is acquiring Clinicare for $5 million, with an adjustment for net
working capital. Initial payment to shareholders is scheduled for
December 31, 2009 with final payments by January 31, 2010.
Clinicare shareholders may also benefit by way of various earn out
performance payments from closing until September 30, 2010. Once the
shareholder amounts have been finalized, qualifying shareholders have
the option to convert their shares into cash or QHR shares at $0.65.
To partially fund this acquisition and ongoing business expansion, QHR
has secured an initial $1 million from the Southern Interior Development
Initiative Trust (SIDIT) thru a four-year debt agreement at 14%
interest. The mission of SIDIT is to support regionally strategic
investments in economic development projects that will have long-lasting
and measurable regional benefits for the Southern Interior of BC.
Additional funding to complete the acquisition is expected to come from
on-going company operations and additional equity investments expected
to be completed before year end.
About QHR Technologies Inc.
QHR operates two business units in distinct markets:
The Electronic Medical Records division offers a suite of medical
software modules that provides computer-based medical records for family
physicians, medical specialists, and surgeons, as well as administrative
modules for billing and patient scheduling, that is a key component of
the move throughout Canada to provide electronic healthcare records for
all Canadians. The EMR division also provides on-site and off-site (ASP)
hosting capabilities. The Enterprise Management Software division
specializes in workforce management software, which consists of
integrated payroll, staff scheduling and human resource software, and in
customized financial management software built on the Microsoft Dynamics
GP platform. These products are targeted at complex healthcare and
social services environments.
Posted November 12, 2009