Amwell Divests Its Virtual Psychiatric Care Business
Amwell, a prominent name in digital health, has made a significant move by selling its Amwell Psychiatric Care (APC) segment to Avel eCare, a leading telehealth services provider. This all-cash transaction allows Amwell to streamline its focus on key growth initiatives and improve overall efficiency in its service delivery.
Details of the Transaction
As part of the deal, Amwell sold its APC business for around $21 million, which includes a definitive cash payment upon closing and a potential earn-out based on performance. This strategic divestiture provides Avel eCare with access to APC's technology, personnel, and the Asana psychiatric clinical network that connects clinicians with the care community.
Enhancing Operational Focus
With this divestiture, Amwell is sharpening its focus on its unified digital care platform—a key aspect of its future goals. Dr. Ido Schoenberg, Amwell's chairman and CEO, emphasized that this transaction not only strengthens the company's financial standing but also aligns with its commitment to providing innovative software solutions. By divesting APC, Amwell is poised to direct more resources toward high-growth areas in digital healthcare delivery.
Commitment to Behavioral Health Services
Despite the sale of APC, Amwell remains dedicated to offering robust behavioral health services through its Amwell Medical Group. This includes AMG Therapy Services and SilverCloud digital behavioral health solutions. The integration of these services into Amwell's comprehensive digital care offerings ensures that clients have access to high-quality mental health support, further enhancing its mission of delivering affordable, accessible healthcare.
Future Guidance and Goals
As Amwell transitions following this transaction, the company has reiterated its guidance for the upcoming year. For the next fiscal year, Amwell projects:
- Revenue estimates forecasted between $247 million and $252 million.
- Adjusted EBITDA in the range of ($137) million to ($142) million.
- Aiming for 1.4 to 1.5 million visits through AMG.
This guidance reflects Amwell's ongoing strategy to enhance its operational capabilities and increase its market share within the healthcare industry.
About Amwell
Amwell is a leader in hybrid care delivery, creating a seamless connection between providers, payers, patients, and innovators. With nearly 20 years of experience and over 50 health plans collaborating with the platform, Amwell's dedication to hybrid care aims to transform the healthcare landscape by providing accessible, affordable, and quality care solutions tailored to patient needs worldwide.
About Avel eCare
Avel eCare has solidified its reputation as a national pioneer in telemedicine, utilizing over 30 years of expertise to deliver high-quality healthcare services throughout communities. With a strong focus on behavioral health and crisis care, Avel eCare remains committed to ensuring patients receive necessary care while supporting clinicians through robust telehealth solutions.
Frequently Asked Questions
What did Amwell divest?
Amwell divested its Amwell Psychiatric Care (APC) business to Avel eCare in an all-cash transaction.
Why did Amwell sell its APC business?
The divestiture allows Amwell to focus on its key growth initiatives and enhance its unified digital care platform.
What are the financial implications of this deal?
Amwell expects this transaction to strengthen its balance sheet and empower its growth strategies going forward.
How much did Avel eCare pay for the APC business?
Avel eCare purchased the APC business for approximately $21 million in cash at closing, with additional earn-out payments possible based on performance.
What services will Amwell continue to offer?
Amwell will continue providing accessible behavioral health services through its Amwell Medical Group and digital health solutions like AMG Therapy Services.
