Well Health to Spin Out Software Unit Wellstar
AI-generated image · Bay Street Wire
The Vancouver-based clinic network will list its pure-play software business on the TSX Venture Exchange later this year.
Well Health announced Tuesday that it will spin out its clinical software tools business, Wellstar, via a combination with a British Columbia-based shell company. The transaction is intended to result in a public listing on the TSX Venture Exchange (TSXV), according to reporting from BetaKit.
The move separates Wellstar from Well Health's primary operations, which include approximately 270 medical clinics across Canada. Well Health CEO and chairman Hamed Shahbazi stated that the standalone listing is designed to provide investor visibility, access to growth capital, and increased flexibility. Shahbazi previously indicated during a Q2 2024 earnings call that Well Health was undervalued relative to the sum of its parts, suggesting a public listing for the software unit by early 2025.
As part of the arrangement, Wellstar is raising $50 million CAD through a private placement of subscription receipts priced at $10 each. Well Health noted that these funds will be released upon the deal's closing to support organic growth, AI-related innovation, corporate uses, and future acquisitions. BetaKit reports that Wellstar has already raised more than $100 million through two equity financings and recently acquired two Canadian medical billing companies to expand its portfolio.
Well Health expects to remain a growing customer and a significant long-term controlling shareholder of Wellstar. The deal is expected to close in September, pending preliminary approval for the TSXV listing.