The company should reap up to $560 million in gross proceeds from the issue.
Sept. 9, 2020
This article originally appears on The Motley Fool, written by Eric Volkman.
A company firmly placed in the burgeoning telehealth segment — privately held Amwell — has outlined the terms of its upcoming initial public offering (IPO) in a regulatory document filed on Tuesday.
The company aims to sell 35 million shares of its Class A common stock at a price between $14 and $16 per share. This would bring in gross proceeds of $490 million to $560 million. Amwell will utilize those monies “for working capital and other general corporate purposes,” which could cover a range of uses. The company specifically mentioned boosting research and development, and expanding its sales team, among other purposes.
Amwell delivers telemedicine services through its proprietary Amwell Platform. With this, it says, as of the end of June it had provided the digital health programs of 55 insurance plans, which in turn covered more than 36,000 businesses employing over 80 million people. Amwell Platform was also in use at 150 of the top health systems in the U.S.; this covers more than 2,000 hospitals.
Since the platform’s launch, according to Amwell, it has been the conduit for 5.6 million virtual visits by patients. Over 2.9 million of these took place in the first six months of this year.
While Amwell is loss-making, its revenue has increased dramatically of late, advancing 77% year over year in that six months to more than $122 million.
Last month, Alphabet‘s (NASDAQ:GOOG)(NASDAQ:GOOGL) Google Cloud unit said it would invest $100 million into the Class C shares of Amwell. Alphabet’s investment is to be made concurrent with the IPO. In return, Google Cloud is to become the “preferred global cloud platform partner,” of the company. The two businesses will combine to develop cutting-edge technologies in the telehealth field.
Amwell has not yet set its IPO date.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy.