Chairman and CEO of Well Health, Hamed Shahbazi, in Vancouver in December, 2015.Ben Nelms/The Globe and Mail
The Competition Bureau has won a court order to obtain records from Well Health Technologies Corp. WELL-T, a consolidator of medical clinics and health-technology providers, as part of an investigation into some of the company’s recent acquisitions.
The investigation, which was first reported in The Globe and Mail last month, kicked off after a series of acquisitions that involved Well Health and Healwell AI Inc. HWAIF, which had an initial public offering in early 2021 under the name MCI Onehealth Technologies Inc.
On April 1, Healwell bought Orion Health Holdings Ltd., a New-Zealand-based global provider of medical-record software and, at the same time, Well Health acquired a controlling interest in Healwell.
The bureau says its investigation is looking into the implications of the acquisitions on users, such as costs or the ability of different software systems to work with each other. The bureau is also concerned about whether the acquisitions raised market barriers for new health-technology companies.
The order was approved by a Federal Court judge on Tuesday and requires Well Health and Healwell to turn over a number of records to the Competition Bureau.
The requested files include all records prepared or received by the companies related to the acquisitions in regards to issues such as pricing strategies, market share or relationships with suppliers.
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Other records to be turned over include financial statements and communications between senior officers.
The order covers various entities controlled by Well Health, but specifically excludes virtual pharmacy Pillway, which is also partly owned by insurer Sun Life.
Tyler Baba, Well Health’s manager of investor relations, said the company would work collaboratively with the Competition Bureau to resolve the investigation.
He said the company is confident that the investigation will not materially affect the business and operations of Well Health.
Well Health made its debut on the TSX at the beginning of 2020 and surged to a high of almost $9 a share in 2021, before falling to the mid-single digits.
The stock fell on news of the Competition Bureau investigation, to a low of $3.67 on Dec. 2, but has rebounded since then. It closed at $4.10 on Wednesday.
In a note to clients last week, Canadian Imperial Bank of Commerce analysts Erin Kyle and Filip Stevanovic upgraded the stock to an “outperformer” with a target of $5.50. They said the headwinds from the bureau investigation were now priced in, and saw upside from Well Health’s plan to sell its U.S. assets in the coming weeks.