Kovo HealthTech Completes Acquisition of The Cvikota Company, Inc.
10th Successful Acquisition Expected to Immediately Increase Annualized Recurring Revenue to $9M USD, +200% vs Fiscal 2020 Revenue
Vancouver, British Columbia--(Newsfile Corp. - November 22, 2021) - Kovo HealthTech Corporation (TSXV: KOVO) (the "Company" "Kovo") — a leader in healthcare Billing-as-a-Service — has officially completed its acquisition of The Cvikota Company, Inc. ("Cvikota" or "Seller").
Acquisition Immediately Accretive
The acquisition, which was previously announced on November 2, 2021, is expected to be immediately accretive to Kovo as Cvikota recorded Trailing Twelve Month (TTM) revenues of approximately USD$3 million with EBITDA of approximately 20% net of synergies.
Kovo CFO Inder Saini, a health tech acquisition specialist, confirms the Cvikota transaction meets Kovo's acquisition strategy target of buying $1 of Annualized Recurring Revenue ("ARR") for every $1 investment of debt or equity to drive growth. As reported in Kovo's Q3 Financials, Saini says the acquisition has immediately increased the Company's ARR to approximately USD$9 million (CAD$11.2 million), an increase of about 200% versus fiscal 2020 revenue.
Optimizing Technology Efficiencies and Trust
"The Cvikota Company is a trusted name with long-standing clients, a great team and a 50 year legacy of providing SaaS-style billing services for physicians, health providers and healthcare clinics across the United States. For Kovo and our shareholders, this acquisition delivers significant accretive revenue, with minimal dilution," says Kovo CEO Greg Noble, a Billing-as-a-Service healthcare technology leader and innovator.
According to Noble, back office integration is already underway and the Company will continue to provide further updates on synergies and optimizations in the weeks ahead. "We're excited to work together with Curt Cvikota and his team to phase-in Kovo's proprietary OneRev technology platform which offers improved efficiencies and our industry-leading sub 30 days cash conversion cycle to allow clients to focus on offering quality patient care," explains Noble.
Under the terms of the Agreement, which has been approved by the TSXV, Kovo HealthTech Corporation, through a wholly-owned subsidiary ("Buyer"), purchased substantially all of the assets of the Seller, including associated trademarks, trade names, brand names goodwill, intellectual property, customer lists and customer contracts.
As consideration for the acquisition, the Company: (i) paid to the Seller cash consideration of approximately $1,375,000 million USD paid at closing (the "Closing Payment"), (ii) a promissory note (the "Note") in the amount of $687,500 USD, with interest at the rate of five percent (5%) per annum. and (iii) in January 2022, the Buyer will cause Kovo to issue common shares having a value, in USD, equal to: gross receipts for 2021 actually collected from certain accounts linked to the acquired business, less the Closing Payment, less the face amount of the Note. The pricing of the shares will be the greater of the (i) the 10 day value weighted average of the closing price at issuance, (ii) the Market Price as defined in the TSX Venture Exchange Policy 1.1 on the date prior to issuance, and (iii) CAD$0.40. The maximum number of shares that may be issued shall not result in a new control person under the policies of the TSXV. Principal of the Note shall be due as to one-half on November 1, 2022 and the remaining half on November 1, 2023.
About Kovo HealthTech Corporation and US Healthcare Billing-as-a-Service
Kovo HealthTech Corporation is a growing healthcare technology company that specializes in Billing-as-a-Service offering SaaS-style recurring revenue contracts and software for US healthcare clinics, hospitals and private practices. Kovo helps healthcare providers digitally track and manage complex patient care registration, services, billing and payments in a seamless way, using its proprietary OneRev technology platform. By offering effective billing practices and technology through long-term SaaS-style contracts, Kovo helps healthcare practitioners focus on offering quality care. To learn more about Kovo and to keep up-to-date on Kovo news, visit www.kovo.co.
For more information:
Greg Noble, CEO
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