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Dialogue goes public: Sun Life still the largest shareholder

By Aurélia Morvan | April 05 2021 10:50AM

Photo: Freepik

Telemedicine services provider Dialogue Health Technologies Inc. debuted on the Toronto Stock Exchange (TSX) on March 30. In its initial public offering, it sold 8,334,000 common shares, trading under the symbol “CARE,” at a price of $12 per share. The IPO raised total gross proceeds of approximately $100 million.

Sun Life, the largest shareholder  

Dialogue's three main shareholders all have minority stakes. Only one insurer is involvedSun Life Assurance Company of Canada.

The company, owned by Sun Life Financial, now holds 9,175,427 common shares of the telemedicine services provider, following the completion of the new share offering. This represents approximately 14.1 per cent of the issued and outstanding common shares, the insurer said in a March 31 release, confirming information originally disclosed in a financial document that Dialogue published on March 23.

The insurer thus remains Dialogue’s largest shareholder, Jean-Christophe De Le Rue, Dialogue's director of public and government relations, told The Insurance Portal 

The company reports that its other two largest shareholders are:

  • White Star Capital: 8,628,223 common shares, or 13.3 per cent;
  • Holtzbrinck: 6,573,194 common shares, or 10.1 per cent.
“New chapter” for Dialogue  

“This IPO is an exciting new chapter for Dialogue and will not change our number-one focus to facilitate the delivery of high-quality care to our members and customers,” Dialogue CEO Cherif Habib said, following the IPO.

“We will continue growing our platform, launching new health and wellness programs and bringing our solution to millions of people worldwide,” he continued.

Distribution of the proceeds 

More specifically, here is how Dialogue intends to use the net proceeds from the treasury offering:

  • Approximately $30 million to $35 million to expand its product offering and continuum of car;
  • Approximately $20 million to $28 million to build and implement its healthcare services in new end-markets; and
  • Approximately $20 million to $28 million to support the growth of its new and existing customers. 

“We may also use a portion of the proceeds to acquire or invest in complementary businesses,” Dialogue adds. Present in Canada and Germany, the company wants to consolidate its positions, but also “expand to new geographies,” Habib points out.

Dialogue may also channel some of the proceeds from the offering into funding negative cash flow in future periods. The company says it has “an accumulated deficit of $50.6 million as at December 31, 2020” and plans to “continue to have negative cash flow.”

Five insurers among its clients  

The telemedicine service provider says it has “distribution agreements with four of Canada's top five carriers” in the group insurance market —Sun Life, Canada LifeBeneva and Desjardins— as well as with iA Financial Group.

MindBeacon Holdings Inc.another telemedicine service provider, went public on the Toronto Stock Exchange in December 2020. One of its shareholders is Manulife, the only one of Canada's five largest insurers that does not have a distribution agreement with Dialogue.

The Dialogue IPO was made through a syndicate of underwriters led by National Bank FinancialRBC Capital MarketsScotia Capital and TD Securities Inc. as bookrunners, together with CIBC World MarketsDesjardins Securities, and Canaccord Genuity Corp.  

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