Kovo HealthTech Corporation (TSX-V:KOVO) has announced a binding agreement to acquire Kairos Billing Solutions LLC, a Utah-based digital medical billing provider specializing in mental health billing solutions.
The healthcare technology company said the acquisition, its 12th, is expected to be immediately accretive to Kovo and supports the company's previously announced 2023 Annual Recurring Revenue (ARR) forecast of US$11 million and return to positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
”The well-established Utah-based business meets Kovo's previously disclosed acquisition strategy which targets buying $1 of ARR for every $1 investment of debt or equity and is anticipated to deliver immediate, accretive growth,” Kovo HealthTech CEO Greg Noble said in a statement.
“Kairos will continue to grow with Kovo's marketing and administrative support,” he added.
Kovo noted that it has agreed to pay US$150,000 in cash in consideration for the acquisition of Kairos, which will be financed under the company's new debt facility of US$7 million and still provides Kovo with room to grow through future acquisitions.
The company added that the acquisition includes Kairos Billing’s associated trademarks, trade names, brand names goodwill, customer lists, software and customer contracts.
As well, Kovo said Kairos Billing's founder Jamie Rowley has agreed to stay on as an employee of Kovo for at least one year to ensure ongoing client service excellence.
The completion of the acquisition is subject to the satisfaction of a number of closing conditions, including receipt of the approval of the Toronto Venture Exchange.
Kovo HealthTech is a growing healthcare technology company specializing in Billing-as-a-Service offering SaaS-style recurring revenue contracts and software for more than 1700 US healthcare providers.
Contact Sean at sean@proactiveinvestors.com