HEALWELL AI buying Orion Health for $115M
Toronto-listed HEALWELL AI is making a multi-million-dollar purchase of New Zealand-based Orion Health to combine their capabilities in data infrastructure and AI.
The Canadian healthcare AI company signed a deal to acquire Orion Health, which offers health data management solutions, for CA$165 million or NZ$200 million ($115 million).
The transaction, advised by JP Morgan, is expected to close in April next year, subject to various approvals from regulators, the Toronto Stock Exchange, and company shareholders.
WHY IT MATTERS
The “game changer” acquisition, according to HEALWELL chairman Hamed Shahbazi, will bring “significant large enterprise customers, recurring revenues, strong operating margins and free cash flow conversion” to their company.
It will also provide them with new channels to distribute their AI solutions, expanding their footprint. Orion Health’s health systems and population-wide data solutions, including a digital front door and a digital care record platform, are used in 11 countries.
For Orion Health’s founder Ian McCrae, a major factor in signing this acquisition deal is “HEALWELL’s commitment to maintaining and investing in R&D in New Zealand.”
“We anticipate that 2025 will be one of our best and most profitable years to date,” Orion Health CEO Brad Porter also commented. According to HEALWELL, its acquisition could generate over CA$100 million ($70 million) in revenue with over CA$20 million ($14 million) EBITDA for Orion Health in 2025.
THE LARGER TREND
This sale deal came over a year after HEALWELL bought a majority stake at Pentavere, which develops a large language model-based platform for processing complex, unstructured clinical data.
HEALWELL’s acquisition of Orion Health is expected to deepen its expansion, particularly into the public healthcare sector. Over the years, the Auckland-based company has signed major government contracts across New Zealand, Australia, the United Kingdom and North America. In 2022, Orion Health bagged the contract to deliver what could be the world’s largest HIE system in Saudi Arabia, housing the data of over 50 million people. Orion Health’s largest public EHR implementation is with the province of Alberta, integrating data from over 120 clinical sources into a unified system; Ontario is currently following suit with both EHR and digital front door implementations. Moreover, early this year, Orion Health announced its plans to target health systems in Southeast Asia.