Vancouver's WELL Health shares soar 35% on U.S. expansion, Li Ka-shing investment

Shares in the company that digitizes medical offices is up about 35% since yesterday morning

hamed shahbazi
Well’s founder and CEO, Hamed Shahbazi founded Tio Networks Corp. before selling it to PayPal Holdings Inc. for $304 million in 2017 | Chuck Chiang / BIV files

Shares in Vancouver's WELL Health Technologies (TSX:WELL) have been soaring since it announced early September 1 that it would enter the U.S. market by buying a majority stake in Silicon Valley's Circle Medical Ltd., and that it has received a $23 million financing round led by existing significant shareholder and Hong Kong billionaire Li Ka-shing.

The company's shares jumped 28% on September 1, and were up around 7%, at $6.59, around 11 a.m. Vancouver time on September 2. The high-flying shares of the company are up about 322% this year, after closing on December 31, 2019 at $1.56.

WELL Health is spending US$14 million to buy Circle Medical in the form of about $9 million in shares and $5 million in cash. Circle Medical's business is centred around delivering telehealth services, and bringing a doctor's office to a patient's home or work. 

Circle Medical has previously delivered telehealth services in 35 states in the last several months of its operations and the company is working on quickly ramping up and covering additional US states, according to WELL Health.

WELL Health's financing round is with a group of investors led by Ka-shing and is in the form of a non-brokered private placement for 4,821,802 common shares at $4.77 per share. Ka-shing is likely best known to many Vancouverites as the man whose company bought the city's former Expo 86 site in 1988 for $320 million, to be spread over 15 years. BIV reported last year that Ka-shing had an almost 11% stake in WELL Health, while his venture capital firm Horizon Ventures owned a 7% stake.

Well’s founder and CEO, Hamed Shahbazi, last year owned about 18% of the company, and is likely best known for founding Tio Networks Corp. before selling it to PayPal Holdings Inc. for $304 million in 2017.

WELL Health is an omni-channel digital health company that aims to empower doctors to provide the best and most advanced care possible while leveraging technology and trends in digital health.  It owns and operates 20 primary healthcare medical clinics and is Canada's third largest electronic medical records supplier, serving more than 2,000 medical clinics. It operates a national telehealth service and provides digital-health technology solutions. 

It is also an acquisitive company given that it has completed twelve acquisitions and three equity investments.