UPH - UpHealth Enters into Definitive Agreement for Sale of Cloudbreak Health Business to GTCR for $180 Million | Benzinga
Proceeds Will be Utilized to Pay Down All Unsecured Debt and Approximately 45% of Secured Debt
UpHealth Will Focus on TTC Healthcare, A Growing, Cash Flow Positive Behavioral Health Business
DELRAY BEACH, Fla., Nov. 16, 2023 (GLOBE NEWSWIRE) -- UpHealth, Inc. ("UpHealth," the "Company") (NYSE:UPH), today announced that it has entered into a definitive agreement to sell its wholly-owned subsidiary Cloudbreak Health, LLC ("Cloudbreak"), best known for its Martti translation offering, to GTCR for $180 million in cash. GTCR is a leading private equity firm that partners with management leaders to identify, acquire and build market-leading companies through organic growth and strategic acquisitions.
UpHealth will utilize the proceeds from the sale for payment in full or in part of the Company's 2026 Unsecured and 2025 Secured Notes, as well as other expenses related to the transaction. The sale of Cloudbreak is expected to close during the first half of 2024, following the receipt of customary regulatory and stockholder approvals and closing conditions, and will allow UpHealth, Inc. to pursue a more simplified strategy that focuses on TTC Healthcare, Inc., a growing, cash flow positive, behavioral health business.
"This agreement enables Cloudbreak's leading telehealth and video remote interpretation solutions to continue to reach customers and patients who rely on them, while providing UpHealth with significant liquidity to substantially reduce its existing debt and drive the business forward with a much healthier capital structure," said Martin Beck, Chief Executive Officer of UpHealth. "At the same time, this transaction sharpens our focus on TTC Healthcare, a profitable and cash generating behavioral health business, as a growth platform."
Cloudbreak is recognized through its core solution, Martti, "My Accessible Real-Time Trusted Interpreter" and has constituted the entirety of the Company's Virtual Care Infrastructure segment since July 1, 2022. The Martti solution provides medical interpreters in over 250 languages, which are delivered through custom Martti devices, such as tablets and smartphones. As part of the transaction, GTCR will acquire complete equity ownership of Cloudbreak, including the aggregate Cloudbreak employee base.
Dr. Avi Katz, Chairman of the Board of UpHealth, commented, "As the Chair of UpHealth since the combination with GigCapital2 in June 2021 and overseeing the executive team over the last three years of restructuring and financing, I commend Andy Panos and the team for leading Cloudbreak's strategic expansion and growth, more than doubling revenue in this period, providing a superior customer service experience, while improving considerably the bottom line of the business. Additionally, UpHealth is executing on paying down majority of its debt to our noteholders, with the goal of freeing capital to grow our behavioral health business."
DLA Piper LLP (US) is serving as legal counsel to UpHealth for ...