Kovo HealthTech Corporation Updates on Revenue Cycle Management (RCM) Market and Acquisition Strategy
US RCM Market Now Valued at Approximately USD$120B*
Kovo Acquisition Model Focuses on USD$2-5M Revenue Targets
Vancouver, British Columbia--(Newsfile Corp. - September 21, 2021) - Kovo HealthTech Corporation (TSXV: KOVO) (the "Company" "Kovo") — a leader in healthcare technology and Revenue Cycle Management ("RCM") software and services — is providing an update on the growing US RCM market and its disciplined acquisition strategy.
Kovo Target: Seasoned RCM Operators with USD$2-5 Million Revenue
According to Kovo CEO Greg Noble, as disclosed previously, the Company has a disciplined acquisition strategy focused primarily on RCM specialist firms that generate USD$2-5 million consistently — and targets buying $1 of Annual Recurring Revenue ("ARR") for every $1 investment of debt or equity. Kovo targets RCM operators with a minimum five year operating track record to ensure consistent and predictable results. Leading US investment banking firm Lawrence, Evans & Co, estimates a pipeline of more than 15,000 US potential acquisition targets operating within the USD$1 to $10 million revenue range.
SaaS-Style Business Model Delivers Growth
"We don't buy bricks and mortar clinics, which are costly and complex to operate," explains Noble. "Kovo buys existing, stable RCM contracts and converts them over to our platform under SaaS-style agreements. Historically, this creates a 20-30% increase in efficiencies and adds immediate accretive revenue," explains Noble, adding that the Company is currently moving through diligence on its proposed 10th and 11th acquisitions.
To date, Kovo has posted 43% year-over-year (YOY) quarterly organic revenue growth on its core RCM software and services business up to the period ending June 30, 2021. Investors can learn more at www.kovo.co and listen to the Company's most recent quarterly investor call featuring Kovo CFO Inder Saini, a public markets veteran and acquisition specialist, Noble and Kovo Executive Chairman and global e-health innovator Dr. Peter Bak.
US RCM Market Estimated at USD$120 Billion and Growing
RCM is a process used by healthcare providers in the US and globally to digitally track and manage patient care registration, services, billing and payments in a seamless, digital way.
According to a recent report by Grand View Research, the US RCM market reached an estimated value of USD$120 billion in 2020 and is growing due to an accelerated pandemic demand for digital healthcare services.
Pandemic Accelerated Demand for RCM Services and Software
According to Noble, the COVID-19 pandemic has accelerated interest and growth in technology-based, outsourced solutions for healthcare providers.
"COVID has created increased reporting complexities and approval requirements, combined with a less stable workforce and a stressed system," he says. "During these uncertain times, our team helps ensure doctors, hospitals and healthcare clinics can count on getting paid more quickly, so they have a reliable revenue stream and can focus on helping patients," explains Noble, adding that Kovo beats industry standards achieving sub 20 day reimbursement times. "For patients, a good RCM software and services system means they can get insurance approvals more quickly and manage their medical appointments, results and payments right from their phone, which improves their overall experience," he adds.
Kovo HealthTech Corporation is a growing healthcare technology company that specializes in RCM services and software for US healthcare clinics, hospitals and private practices. The Company's focus is organic growth of its core RCM software business and acquiring profitable RCM related businesses and systems. Kovo optimizes acquired businesses by leveraging its over 20 years of operating experience and proprietary technology. To learn more about Kovo and to keep up-to-date on Kovo news, visit www.kovo.co.
Forward-Looking Information and Statements
This press release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") concerning the Company and its subsidiaries within the meaning of applicable securities laws. Forward-looking information may relate to the future financial outlook and anticipated events or results of the Company and may include information regarding the Company's financial position, business strategy, growth strategies, acquisition prospects and plans, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans and objectives.
Particularly, information regarding the Company's expectations of future results, performance, achievements, prospects or opportunities or the markets in which the Company operates is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects", "budgets", "scheduled", "estimates", "outlook", "forecasts", "projects", "prospects", "strategy", "intends", "anticipates", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will" occur. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. Many factors could cause the Company's actual results, performance, or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking information, including, without limitation, those listed in the "Risk Factors" section of the final prospectus of the Company dated May 26, 2021. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this press release. Forward-looking information, by its nature, is based on the Company's opinions, estimates and assumptions in light of management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the Company currently believes are appropriate and reasonable in the circumstances. Those factors should not be construed as exhaustive. Despite a careful process to prepare and review forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. These factors should be considered carefully, and readers should not place undue reliance on the forward-looking information. Although the Company bases its forward-looking information on assumptions that it believes were reasonable when made, which include, but are not limited to, assumptions with respect to the Company's future growth potential, results of operations, future prospects and opportunities, execution of the Company's business strategy, there being no material variations in the current tax and regulatory environments, future levels of indebtedness and current economic conditions remaining unchanged, the Company cautions readers that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which the Company operates may differ materially from the forward-looking statements contained in this press release. In addition, even if the Company's results of operations, financial condition and liquidity, and the development of the industry in which it operates are consistent with the forward-looking information contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods. This press release refers to certain non-IFRS measures, including ARR. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. The Company's definitions of non-IFRS measures used in this release may not be the same as the definitions for such measures used by other companies in their reporting. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS.
The Company uses non-IFRS financial measures to provide investors with supplemental measures of its operating performance and to eliminate items that have less bearing on operating performance or operating conditions and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. ARR is a non-IFRS measure that provides an indication of future revenue and billings from customers as of the reporting date. ARR represents the sum of the annual recurring revenue from existing customer contracts or commitments as of the reporting period end date, and as such management of the Company believes that ARR is a meaningful measure for assessment of the Company's performance. ARR is recorded as deferred revenue when it is invoiced and is recognized in revenue evenly on a monthly basis over the contract term. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information, which speaks only as of the date made (or as of the date they are otherwise stated to be made). Any forward-looking statement that is made in this press release speaks only as of the date of such statement.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For more information:
Greg Noble, CEO
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