B.C.’s fastest-growing company wants to split into two entities that would trade separately on the Toronto Stock Exchange.
The rationale is to entice new investors.
Well Health Technologies Corp. (TSX:WELL) topped , registering a whopping 2,265.2-per-cent revenue growth between 2019 and 2023. In its 2023 fiscal year, the company generated $776,054,000 in revenue, up from $32,810,782 in 2019.
That growth shows no sign of stopping, as sales have continued to rise throughout 2024. The three-month period that ended June 30 was Well Health’s 22nd consecutive quarter of record-breaking revenue.
The company now anticipates generating between $970 million and $990 million in revenue this fiscal year.
Fuelling sales growth are two distinct revenue streams. The dominant one comes from operating approximately 175 medical clinics in Canada, while the secondary stream comes from selling health and office-management technologies to medical clinics, CEO Hamed Shahbazi told BIV.
He said the two sides of the business would be better off as separate ventures.
“About 90 per cent of our overall revenue comes from providing care to patients, and about 10 per cent, or probably less than 10 per cent now, comes from actual technology revenue,” he said.
“We really want to grow both of those.”
His plan to split the company into two would mean investors could buy shares solely in the technology company, which is a significantly different business than providing patient care in medical clinics.
The plan is for the Well Health division that runs medical clinics to own a majority stake in the technology company—dubbed Well Provider Solutions—which could go public in the first half of 2025, according to Shahbazi.
If this restructuring proceeds, the result would be that investors in Well Health would be primarily exposed to the medical-clinic business, with about 10 per cent of their investment exposed to the technology company.
Investors who solely want exposure to the latter will newly be able to make that investment, Shahbazi explained.
“It allows us to create greater capital and currency for that [technology] group, so we can go and do more acquisitions, and basically grow that business,” he said. “It will still be majority-owned by Well, so not much will change as far as our ownership, except that the [technology side of the business] will have a ticker symbol.”
Shahbazi said he anticipates hiring a CEO for Well Provider Solutions, and that he would serve as its chair while continuing to serve as CEO of Well Health.
Organic growth and growth by acquisition
Shahbazi told BIV that since he founded Well Health about eight years ago, the company has made more than 80 acquisitions.
He is quick to add that the company has also seen substantial organic growth.
One of Well Health’s significant acquisitions was in 2020, when it , which delivers tele-health services that bring doctors’ offices into patients’ homes or workplaces.
“When we bought Circle Medical, it was doing about US$5 million in revenue,” Shahbazi said. “We’re now on a run-rate of over US$100 million in just four years. So that’s all organic growth. That’s a huge amount of organic growth.”
One of its acquisitions in 2021 was a deal
“When we bought Wisp, it was doing about US$30 million in revenue,” he said. “Now it’s doing about US$75 million in revenue.”
A third example of significant organic growth is seen in Well Health’s Canadian medical-clinic division. Shahbazi said that slice of the business is growing by about 20 per cent annually.
Well Health made its biggest acquisitions in 2021. First came the US$372.9 million transaction to buy U.S.-based CRH Medical Corp.—a niche provider of services to help gastrointestinal disease practitioners.
Then followed , which is the largest cardiology network in Canada, Shahbazi said.
“It is also the largest provider of imaging diagnostics, such as ultrasound and CT [computed tomography] scans,” he said. “In Ontario, there’s no larger provider of these services outside of the hospital channel.”
MyHealth operated medical clinics, and that acquisition was what made Well Health the largest operator of medical clinics in the country, with what at the time was 74, or about 100 fewer than what the company operates today.
About 60 per cent of Well Health’s revenue comes from the U.S., while the rest comes from Canada, Shahbazi said.
Shahbazi’s second time on BIV’s fastest-growing list
When Shahbazi founded Well Health in the 2016-2017 timeframe, his day job was as CEO of TIO Networks, a software company focused on processing payment transactions that he founded in 1997 and took public in 1999.
He hired someone to manage the Wellness venture that he was running off the side of his desk. Originally named Wellness Lifestyles, that venture was focused on what Shahbazi described as “aging gracefully.”
That forerunner business to Well Health operated yoga studios and had a partnership agreement with new-age author and fitness guru Deepak Chopra.
Shahbazi said he soon realized that the venture would be difficult to scale into a big business so he pivoted into the operation of medical clinics.
Bay Area payments giant PayPal Holdings, Inc. (Nasdaq:PPYL) liked TIO Networks enough to .
Shahbazi stayed on for approximately six months before he left to grow his secondary Wellness company, which had started to buy medical clinics.
His stake in TIO Networks was what he described as being in the “mid-single digits,” so he could have netted roughly US$11.9 million, or $15.1 million in Canadian capital given the exchange rate at the time.
While Shahbazi was able to pump some of his own money in the venture, he has relied on multiple venture-funding rounds, and investments from companies .
Shahbazi's experience with TIO Networks taught him that he did not want to lead a company with large companies as customers that required significant technological integration and long sales cycles, he said.
“TIO Networks was very successful, but it took a lot of time and that was very instructive for me,” Shahbazi said. “It was very helpful to learn that I wanted my next business to be one that where I had more independence in controlling my [corporate] growth and not be subject to some very long sales cycles.”
Some parts of Well Health’s business do have longer sales cycles but, for the most part, Shahbazi said, it is not limited in its ability to grow.
“Most of our businesses is ... subject to our own appetite to grow, to acquire, to integrate and to recruit physicians,” he said.
