HealthLynked completes acquisition of MedOfficeDirect LLC; adds discounted medical supplies for patient members

HealthLynked Corp (OTCQB:HLYK) announced on Tuesday that through a cash-and-stock deal, it has acquired MedOfficeDirect LLC (MOD), a Naples, Florida-based virtual distributor of discounted medical supplies to both consumers and medical practices.  The acquisition, costing up to $6 million, includes $2.7 million of HealthLynked stock issued at the closing of the deal, $0.7 million in cash, and up to $2.6 million of additional HealthLynked common stock, based on MOD achieving specific annual revenue milestones for the next four years, said the company.  MOD's debtholders agreed to accept membership interests in MOD in exchange for satisfaction of 40% of their outstanding debt, with the remaining 60% satisfied by the $0.7 million cash paid at closing. They also agreed to waive and forgive all accrued interest payments totaling $0.6 million. READ: HealthLynked subsidiary ACO Health Partners reports nearly $768,000 in shared savings revenue thanks to collaborative Medicare approach "The acquisition of MedOfficeDirect LLC allows us to better serve our patient members and healthcare providers. MedOfficeDirect has demonstrated the demand for a low cost direct-to-consumer medical supplier with significant year-over-year revenue growth,” said HealthLynked CEO Michael Dent. “As the HealthLynked Network has grown, through our recent ACO acquisition, new patient members, and healthcare providers, we see significant opportunity to increase our value in healthcare and drive even more adoption across all these areas," he added. Medical supply sales in the US top $155 billion annually. Launched in 2014, MOD serves both consumers and healthcare providers with more than 13,000 name brand medical supplies in more than 150 different categories. It has some of the lowest prices on name brand medical products online, shipped directly to the customer within three to five days by leveraging volume buying. “Providing an easy way for patient members and healthcare providers to purchase medical supplies at a low cost will help drive increased adoption of the HealthLynked Network while increasing the company's consolidated revenue and profit,” said the company. Key benefits of the acquisition include: Expected to contribute around $1.5 million of revenue in year one, increasing HealthLynked's consolidated revenues by some 25%. The earnout is tied to four years of 25% annual growth, resulting in a year 4 revenue earnout target of $2.9 million by 2024;        Provide company and customer synergies as HealthLynked expands the number of patient and physician members in both the HealthLynked Network and in its ACO network and plans to offer MOD's discounted medical supplies to this user base; and It will allow expansion into the multi-billion-dollar discounted medical supplies industry. Access to MOD's existing customer base is expected to further increase the number of patient members and healthcare providers using the HealthLynked Network. HealthLynked CFO George O'Leary said: "This is the third of what we expect to be numerous acquisitions for HealthLynked, focused on complementary businesses that enhance the HealthLynked Network, for which we have set a goal of adding tens of millions of patients and hundreds of thousands of physicians over the next five years." He continued, "This acquisition is unique in that it is focused on purchasing a high growth business that distinctively complements the anticipated growth in our digital healthcare business. We are paying only 12% in cash, with 45% in stock and up to 43% in a four-year stock-based earnout that requires 141% growth during this period for the earnout to be fully realized."    Contact the author Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive