12:10 PM EDT, 06/11/2024 (MT Newswires) -- Healwell AI (AIDX.TO) said Tuesday it agreed to acquire VeroSource Solutions for about $24.5 million to add its cloud-based healthcare platform.

The healthcare-focused artificial-intelligence company expects to pay a significant portion of the deal consideration in Class A subordinate voting shares. The transaction is expected to be financially and strategically accretive.

Under the deal, Healwell will buy all of the shares of VeroSource in a two-step transaction. The initial acquisition of about 51% of the VeroSource shares is expected to close on July 1, and the second acquisition of the remaining VeroSource shares is expected to close by Jan. 1, 2025.

"Once integrated with our best-in-class AI-powered disease detection and patient identification capabilities, VeroSource has the potential to roll out very significant population health features that are very much at the core of value-based healthcare trends," chief executive Alexander Dobranowski said in a release.

The purchase price of the 51% initial acquisition is about $12.5 million, made up of $3.9 million in cash on the initial closing date; $6.1 million through the issuance of Healwell subordinate voting shares on the initial closing date using the prior 20-day volume-weighted average price from the announcement date; and a four-year performance-based earn-out of up to $2.5 million, payable in cash, subordinate voting shares or a combination of both.

The parties have agreed to enter into a standard shareholders' agreement with mutual board nomination rights to govern the business of VeroSource from the initial closing date to the second closing date.

The purchase price of the second acquisition is about $12 million. This comprises $3.8 million in cash on the second closing date; $5.8 million through the issuance of HEALWELL AI subordinate voting shares on the second closing date using the prior 20-day VWAP from the initial announcement date; and an increase of $2.4 million to the maximum amount of the four-year performance-based earn-out that commenced on the initial closing date, for a combined maximum amount of $4.9 million, payable in cash, HEALWELL subordinate voting shares or a combination of both.

The company's shares were last seen down $0.20 to $2.76 on the Toronto Stock Exchange.

Price: 2.77, Change: -0.19, Percent Change: -6.42