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Well Health to acquire electronic medical records provider KAI in C$10.8M deal

Vancouver, British Columbia-based Well Health Technologies Corp. is acquiring Kela Atlantic Inc. in a cash and share deal worth about C$10.8 million.

Healthcare facilities operator Well Health said Kela Atlantic, which does business under the name KAI Innovations, provides electronic medical records services, or EMR, and is the provider of an open source EMR software called Open Source Clinical Application Resource in Canada.

Well Health Chairman, CEO and director Hamed Shahbazi said the acquisition will position the company as the third-largest EMR services vendor in Canada.

Under the agreement, Well Health will pay KAI C$6 million in cash upon closing, and C$2 million worth of Well Health shares at 70.5 Canadian cents per share. In addition, Well Health will pay about C$2.8 million in the first year after closing of the deal.

The company will also pay a conditional earnout based on overall operating performance of up to C$7 million.

Well Health expects to fund the transaction with a combination of cash on hand and a private placement financing led by GMP Securities.

Upon closing of the deal, KAI's CEO Arjun Kumar will become Well's chief information officer while KAI's COO Sara Bond will join Well Health as senior vice president of product development. Kumar and Bond will continue in their roles at KAI.

The transaction is subject to customary closing conditions, including approval from the TSX Venture Exchange.

Earlier in May, Well Health had said it was acquiring another electronic medical records provider OSCARprn - Treatments Solutions Ltd. for C$876,000.