Doctor Care Anywhere Group Plc (ASX: DOC), an Australian-listed UK-based telehealth company, has expanded in the domestic market with its first acquisition since its ASX debut in December last year.
The company is paying $11 million to buy Tasmania-based GP2U Telehealth, a private company that trades as both GP2U and Psych2U.
The price represents 2.5 times the gross revenue of GP2U Telehealth and elevates Doctor Care Anywhere’s presence in providing tele-mental health services. The Psych2U business represents 78 per cent of GP2U Telehealth’s total revenue.
The acquisition also opens Doctor Care Anywhere to GP2U Telehealth’s existing income streams through a mixed billing service, including a channel partnership with HCF, Australia’s largest not-for-profit health insurer.
“Doctor Care Anywhere sees significant opportunities to grow national mental health and GP telehealth services in Australia and will focus on the ever-growing mental health burden in Australia, particularly in rural and remote areas,” says the company in a statement to the ASX.
“Approximately half of all adults in Australia will experience mental health concerns at some point with an estimated cost to the economy of up to $220 billion each year.”
Doctor Care Anywhere says it is capitalising on increased spending on mental health services as a direct response to COVID-19.
“The Australian government has increased spending on mental health to $6.3 billion for 2021-223, including a significant expansion of telehealth services to respond to high levels of mental distress in communities across the country,” says the company.
“GP2U Telehealth is well placed to meet this demand through its mental health service provision and its recent growth performance demonstrates clear strategic and commercial reasons for this acquisition.”
Doctor Care Anywhere cites a rise in consultations by psychiatrists, psychologists, and GPs of 51.4 per cent to 35,000 for FY21.
The company says it has a track record of serving patients and their local GPs across Australia, especially those in under-served regional, rural, and remote areas.
The buyout provides an opportunity to increase its existing base of clinicians comprising 10 GPs, 28 psychiatrists and 22 psychologists to support future growth.
GP2U Telehealth’s gross revenue surged 54.8 per cent in FY21 to $4.4 million.
Doctor Care Anywhere Group posted a full-year loss of UK£31 million, although it trimmed losses in the latest half year to UK£8 million.
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