As it departs from Australia to cement its base in the UK alone, telehealth company Doctor Care Anywhere Group (ASX: DOC) has decided to sell its Aussie subsidiary GP2U Telehealth. The Company had bought GP2U for $11 million in September 2021 to tap into the mental health market in Australia, which worsened following the pandemic. Now, it is exiting the Australian telehealth market after a rather troublesome stint.
In keeping with that, DCA has signed a Share Purchase Agreement with Connected Medical Solutions Limited, trading as My Emergency Doctor (“MED”), for the sale of GP2U.
Under the terms of the agreement, MED, Australia’s telemedicine service staffed by specialist emergency doctors, will acquire 100 percent of GP2U’s share capital for a total consideration of $3 million. The consideration comprises $2.5 million worth of unlisted ordinary shares in MED and only $500k in cash, which will be adjusted for normalised working capital.
The completion of this transaction, anticipated to take place by the end of June 2023, is subject to various conditions outlined in the Share Purchase Agreement, including obtaining shareholder approval from MED. Standard representations, warranties, and indemnities are included in the agreement, as expected in a transaction of this nature.
Highlighting DCA’s strategic shift toward its core UK market, Chairman John Stier commented, “As we have previously announced, we are focusing on our core UK market, with the switch to a UK-based board following the conclusion of the AGM being the first step in this process. Completing the sale of GP2U will further cement this strategy, enabling management to focus on UK growth and profitability going forward.”
He added, “We are also delighted that GP2U will become part of such a capable and exciting business as MED. As shareholders in MED, we are excited to be involved in their journey and look forward to working with them in the future.”
The Company has seen many board changes over the past few months, with its Australian leaders, CFO and CEO stepping down. However now, it claims to be returning to form. Excluding GP2U, DCA completed 121,200 consultations over April and May, representing a 30% increase compared to the previous year.
Notably, May witnessed the highest number of consultations in the Company’s history, with 65,200 consultations conducted. Additionally, DCA has successfully negotiated an annual price increase with AXA Health, aligning with the Company’s budget expectations.
To improve its budget, over a month ago, DCA reduced its headcount to adapt to ongoing industry trends. As part of this reduction, the Board of Directors based in Australia, including Richard Dammery, Simon Calver, and Vanessa Wallace, stepped down from their positions. According to DCA, the distance between Australia and the UK was certainly not making the heart grow fonder.
DCA remains on track to launch its Mixed Clinical Workforce proposition in H1 FY23 and reaffirmed the guidance previously issued on February 27, 2023, including becoming EBITDA positive and maintaining a minimum of $5.5 million in cash balance.
Alinda is a Business Reporter for The Sentiment
Latest posts by Alinda Gupta (see all)
- Ovanti’s iSentric signs contracts worth $14.4m with Malaysian commercial bank - June 27, 2024
- Baby Bunting fights back from retail downturn with 5-year strategy, includes Gen-Z focus and self-funded growth - June 27, 2024
- CLEO meets with US FDA to develop strategy for ovarian cancer test launch - June 26, 2024
Leave a Comment
You must be logged in to post a comment.