The federal watchdog is investigating whether the takeover is affecting choice and cost for users.
Canada's federal competition watchdog has received a court order to continue its investigation into the recent acquisitions of digital health company Well Health.
In November the Competition Bureau filed an application to investigate whether Well Health's purchase of Healwell AI likely to stifle competition in health care technologies and services in Canada.
Well Health took a majority stake in Healwell AI just as Healwell struck a deal to buy New Zealand-based Orion Health.
In April Well Health received controlling interest at longtime partner Healwell AI, based in Toronto, just as Healwell struck a deal to buy New Zealand company Orion Health. Well Health CEO at the time Hamed Shahbazi said that the purchase will combine Well Health's scale, Healwell's AI expertise and Orion's knowledge of global health data systems to bring “cutting-edge” AI solutions to patients.
On Tuesday, a federal judge approved a court order requiring Well Health and Healwell to turn over records and information related to the investigation. The investigation will focus on how Well Health's acquisition of Healwell will impact choice and cost for users, and whether it will create barriers to new competitors entering the digital health space.
Well Health, listed on the Toronto Stock Exchange, has a broad portfolio of digital health tools for healthcare providers, including diagnostics, record keeping, patient portals and artificial intelligence (AI) transcription tools. Toronto-headquartered MCI Onehealth, which now does business as Healwell AI, went public in 2021 and sought to develop artificial intelligence software for digital health.
In a statement to BetaKit on Wednesday, Well Health called the court order a “merger review” related to the Healwell acquisition. It said the bureau conducts “a large number of merger reviews each year” and looks forward to “cooperating” with the bureau during the investigation.
Strategic focus on acquisitions
In April, Well Health expected the Healwell acquisition to generate revenue of approximately C$160 million with positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) next year, while the Orion Health acquisition would generate revenue of more than $100 million. Helwell published quarterly earnings in November was $30.4 million, mainly due to the acquisition of Orion.
Well Health Fiscal Policy profit for the 3rd quarter showed significant growth in November driven by acquisitions. The company's revenue was a record $364.6 million, up 56 percent from the same period last year.
CONNECTED: Healwell plans to offload research and patient business by focusing on artificial intelligence
Both Healwell and Well Health have made acquisitions a strategic focus recently. Healwell acquired contract research company BioPharma Services in June 2024This was followed by the acquisition of Intrahealth, artificial intelligence documentation company Mutuo, and patient identification company Pentavere. Well Health also bought a number of Canadian clinics, including 10 from Shoppers Drug Mart.
Last quarter, Healwell sold parts of its business, including its group of family medicine and specialty clinics and its stake in Mutuo Health Solutions Inc. (which it sold to another Well Health subsidiary, Wellstar). In August, Hilwell said that part of the plan become a pure software-as-a-service (SaaS) and services company.
Image courtesy of Well Health.
