Alberta’s billionaire Mannix family has picked up a stake in one of Canada’s fastest growing companies, virtual health care provider Maple Corp., in exchange for selling their own online medicine business to the Toronto enterprise.
Maple said Wednesday it had bought virtual health care provider Wello from INLIV Inc., a Calgary health and wellness facility owned by the Mannixes’ private Coril Holdings Ltd. The deal, believed to be valued in the low tens of millions of dollars, was covered largely by issuing Maple stock to Coril. The exact terms of the sale were not disclosed.
“We are confident that the Maple team shares our goals of service excellence, responsible innovation, and growth and we look forward to supporting Maple’s success,” Mike Mannix, Coril’s executive vice-president, corporate and venture development, said in a release.
The Mannixes are one of western Canada’s most storied business families. In 1898, Frederick S. Mannix started in business by buying a team of horses to move earth for the construction of Canadian Pacific Railway branch lines in the Prairies. The family business helped build the St. Lawrence Seaway, the Trans Canada Highway, the James Bay hydroelectric projects, and the subway systems in Toronto and Montreal. It eventually moved into coal, pipelines, and oil and gas.
Third-generation brothers Frederick and Ronald Mannix divested most of their energy assets in 1997 and formed Coril. It now owns a railway maintenance and services company and real estate assets. INLIV created Wello in 2017, two years after Brett Belchetz, a doctor, co-founded Maple.
“For us, bringing on such a strong shareholder was absolutely one of the considerations in terms of moving forward with this deal,” Dr. Belchetz, Maple’s chief executive, said in an interview. “Adding another shareholder of that calibre … creates new sales opportunities based on the respect and relationships they command.”
The deal will help Maple expand its national presence by giving it control of Wello’s Western Canadian-focused business, with 350 corporate customers. Maple has a stronger presence than Wello in the east, particularly in Quebec.
Neither company discloses financial data, but Wello’s revenue is believed to be in the single-digit millions. Maple, which is accessible to four million Canadians through an array of channels – including provincial health systems in Nova Scotia and Prince Edward Island, insurers such as Green Shield Canada Group, and employers including Unilever Canada – generates tens of millions of dollars in annual revenue. Maple’s 2,000 medical practitioners, who work for the company on contract, handle thousands of daily consultations.
Telemedicine had been a nascent but growing sector before the pandemic. Now, it has become an in-demand space as people look for ways of visiting medical practitioners without exposing themselves to COVID-19.
Maple ranked second on Deloitte’s most recent list of the 50 fastest-growing Canadian companies, and 12th across North America, with three-year revenue growth of 15,358 per cent. Like its larger rival Dialogue Health Technologies Inc., Maple has attracted big-league backers. Loblaw Cos. Ltd., whose Shoppers Drug Mart business offers Maple-powered virtual health care services in stores, led a $75-million investment in the company in 2020. Royal Bank of Canada and Germany’s Acton Capital SE are also investors.
The pandemic-fuelled boom prompted several digital health companies to go public at high valuations in 2020 and 2021, including Dialogue, MindBeacon Holdings Inc. and LifeSpeak Inc. Maple also considered going public last year but didn’t proceed – a fortunate move in retrospect. Growth among its public peers eased off, albeit to levels that are still high even by startup standards, and their valuations crashed.
Dialogue, for example, posted third-quarter revenue growth of 120 per cent, but its stock closed Thursday at $6.22, barely half its $12-per-share IPO price last March. “I think right now being a public company in our industry is probably not an easy place to be,” Dr. Belchetz said. He added that Maple’s revenue doubled in 2021 and would likely do so again in 2022.
Dr. Belchetz said he expected industry consolidation to continue: Telus Corp. bought Montreal’s EQ Care in December, 2020, for $255-million while TSX-Venture-listed CloudMD Software and Services Inc. said last November it would buy MindBeacon. “Certainly there is consolidation starting to happen and this deal is naturally part of that for us,” he said, adding that Maple would consider further acquisitions.
As for telemedicine’s postpandemic future, Acton venture partner Hannes Blum said in an interview: “We’re still bullish about the overall transition from in-person to virtual care. We still believe it is a strongly growing market and that we can help lower costs in the Canadian health care system and provide great care.”
Dr. Belchetz voiced similar optimism. “I think the future is the same as for any other part of the economy that is digitized,” he said. “I don’t think you undo digitization. Nobody is out there saying ‘I’m dying to drive across town and spend hours in a waiting room.’ Businesses like ours are here to stay.”
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Sean Silcoff