Well Health Spin-off (Well Provider Solutions) Notes

August 19, 2024 Notes

During its Q2 2024 conference call on August 15, 2024, Well Health (WHTCF) announced that it plans to spin off its SaaS business segment, Well Provider Solutions (WPS). The plan is to make WPS a standalone, Well-controlled company in the first half of 2025. Although all details haven’t been finalized, it sounds like WPS will complete a partial IPO, but Well Health will maintain majority control.

I’m not deeply familiar with Well Health, but it is a fairly large ($1.2BN market cap) Canadian digital healthcare. It serves various sub healthcare industries including: staffing, anesthesia, gastrointestinal health, women’s health, primary care, and mental healthcare. It offers its own suite of technology services as well as third party offerings. My initial impression of the company is that it looks cheap trading at 17x forward earnings given its expected to grow revenue at a high single digit clip and earnings at ~25% per year. However, in digging a little deeper, I’ve learned that the company has made many acquisitions. As such, I’m going to proceed with caution. 

Further, partial IPOs generally do not unlock significant value. I will continue to dig deeper into this situation, but it doesn’t look immediately actionable.