Amwell has sold its virtual psychiatric care business, Amwell Psychiatric Care (APC), to telehealth company Avel eCare for around $21m.
The deal includes APC’s technology, personnel and psychiatric clinical network Asana. Along with the cash payment, Amwell is in line for an additional earn-out payment.
Amwell’s CEO Ido Schoenberg said the transaction enables the US company to “place an even greater focus” on delivering “more accessible, affordable and high-quality care”.
Schoenberg added the deal would also help to achieve a positive cash flow in 2026.
Shares in Amwell, listed on the New York Stock Exchange as American Well Corporation, did not change on 9 January as US stock exchanges were closed on a national day of mourning for former President Jimmy Carter.
Shares in the company have plummeted since highs in 2020 and 2021. The company cut 10% of its workforce at the end of 2023 and posted losses of $679m for the same year.
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By GlobalData
Amwell originally bought the psychiatric care virtual business when it acquired Aligned Telehealth in January 2019 for an undisclosed amount. Aligned Telehealth provided telepsychiatry services, including virtual behavioural and mental health consultations. This was done via a network of clinical experts, with the company specialising in providing behavioural telehealth and telepsychiatry capabilities to hospitals and health plans.
Six years later, Amwell has offloaded the business as it “continues to sharpen its focus on key growth areas, driving greater efficiencies and fulfilling clients’ digital care ambitions”, according to the company. Amwell further stated it has “continuously adapted to market demands” throughout its history.
“The divestment of APC will enable us to increase focus on our unified, world-class digital care platform. The transaction strengthens our balance sheet while emphasising our focus on growing accretive software contribution in our product mix,” said Schoenberg.
The telehealth sector took a big hit when a market trailblazer – Babylon Health – filed for bankruptcy in August 2023. The telehealth market has demonstrated versatility as healthcare is increasingly conducted virtually. According to GlobalData, the market, which was worth $690m in 2015, is expected to reach $3.8bn by 2030. However, the boom in its profitability that was seen during the Covid-19 pandemic is not at the same level. Further market analysis by GlobalData estimates Amwell is the second leading company in the US telehealth market behind Teladoc Health.
Amwell said it would continue to deliver accessible and convenient behavioural health services through its affiliated clinical partner Amwell Medical Group. Amwell acquired two digital health companies, SilverCloud Health and Conversa Health, for $320m in 2021.
In a boost to the company’s outlook, Amwell secured a contract with the Defense Health Agency (DHA). Worth up to $180m, the deal will see Amwell deploy its services, such as its Converge platform, for virtual care meetings in government and public sectors.
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