CloudMD Announces Go-Private Transaction with CPS Capital

TORONTO, May 15, 2024 (GLOBE NEWSWIRE) -- CloudMD Software & Services Inc. (TSXV: DOC, Frankfurt: 6PH) (the “Company” or “CloudMD”), an innovative health services company transforming the delivery of care, and CPS Capital (“CPS Capital”), an entrepreneurial investment firm partnering with businesses and teams to realize their growth goals, are pleased to announce that they have entered into an arrangement agreement (the “Arrangement Agreement”) pursuant to which CPS Capital (through an affiliate) (the “Purchaser”) has agreed to acquire all of the outstanding common shares (the “Shares”) of CloudMD for cash consideration of C$0.04 per Share (the “Transaction”).

The Transaction is the culmination of a strategic and liquidity review that the Special Committee (as defined below) has been engaged in since July 2023, with the assistance of INFOR Financial Inc. Such review was necessary to address the Company’s liquidity issues, which were largely the result of the number of acquisitions that the Company completed over the last four years. Although management of the Company was able to deliver on organic growth targets and strengthen the balance sheet (through cost reductions resulting in over C$20 million in cost savings) while creating an ecosystem of care, the Company’s forecasted liquidity issues impacted the Company’s ability to remain a going concern. This is the result of the Company being unable to generate positive cashflow to support the business while making scheduled debt repayments, along with limited refinancing opportunities on commercially reasonable terms without onerous covenants, restricted business operations and forecasted growth initiatives.

The Transaction provides the capital to support the Company’s business with specific consideration to all of the Company’s stakeholders and was the best alternative available to ensure the ongoing viability of the Company. If the Transaction is not completed, the Company does not expect that there will be an alternative that would provide any value to the holders of CloudMD’s equity securities.

Karen Adams, Chief Executive Officer of CloudMD, stated:

“We are happy to receive the support of CPS Capital, which will provide us with the ability to execute on our long-term plan, accelerate growth, and move forward on a strong financial footing. The Transaction will provide the Company with much-needed capital to execute on future initiatives to sustain and grow the business. The healthcare sector has large demand for outcome-based service providers who have the ecosystem of services.”