A definitive agreement has been signed for the sale of US-based video remote interpreting (VRI) provider Cloudbreak Health by its current owner, UpHealth, a publicly-listed provider of digital healthcare solutions.
On November 16, 2023, private equity firm GTCR announced that it will buy Cloudbreak from UpHealth for USD 180m in cash. The transaction is expected to close in early 2024, subject to regulatory and stockholder approvals.
At the core of Cloudbreak’s offering is Martti, is a HIPAA-compliant VRI solution that enables patients with limited English proficiency (LEP) to interact with healthcare professionals through a network of remote interpreters.
Cloudbreak is currently housed in UpHealth’s Virtual Care Infrastructure (VCI) segment. UpHealth’s latest financial results recorded revenues of USD 34.3m and profit of USD 18.7m for VCI in the first half of 2023. During this period, Cloudbreak was the only contributor to VCI — Its other business, Glocal, was deconsolidated in July 2022.
These figures set the purchase price for Cloudbreak at roughly 2.5x revenue and 4.8x profit, based on H1 2023.
The Benefits of Standing Alone
Cloudbreak’s soon-to-be new owner, GTCR, invests in sectors including business and consumer services, financial services and technology, healthcare, and technology, media, and telecom. It has invested in more than 270 companies since its founding in 1980 and has a long list of exits to its name.
According to GTCR’s press release, the firm will make “substantial investments in [Cloudbreak]” including, among others, in its “tech-enabled offerings to accelerate organic growth.”
GTCR’s Managing Director and Head of Technology, Media & Telecommunications, Mark Anderson, described Cloudbreak as a “leader in the healthcare interpretation end-market” and said the company “will benefit as a standalone provider of these critical services.”
Meanwhile, Cloudbreak’s co-Founder and President, Andy Panos, praised GTCR’s “wealth of experience in healthcare technology and [its] deep understanding of Cloudbreak’s potential.”
In its press release, UpHealth said the agreement provides the company with “significant liquidity to substantially reduce its existing debt and drive the business forward with a much healthier capital structure.” At the same time, the sale will enable Cloudbreak to continue supporting customers and patients with its telehealth and VRI solutions, UpHealth said.
The transaction is being supported with debt financing from Monroe and Barings.
Assuming the relevant approvals are granted, Cloudbreak will join a growing cohort of US-based remote interpreting providers with private equity backers. Cloudbreak rivals Propio, GLOBO, and Boostlingo have all secured private equity investment in the past three years.