A Small Cap Healthcare Company Partnered with Walmart - Jack Nathan Medical (TSXV:JNH)

We are notifying subscribers of a new company in the healthcare space, Jack Nathan Medical (TSXV:JNH).

Quick Pitch: Brand new healthcare listing. Partnered with Walmart since 2006. Delivers complete and operational turn-key clinics in over 82 Walmart stores across Canada + Mexico. Tight cap structure. High margin. EBITDA 25% of sales. Opportunities to increase sales and profitability through telehealth enhancements and international expansion.


Jack Nathan Health provides various different forms of patient care, made possible through patient-centric physicians, a variety of medical services, technology and programs, designed to put patients first. Jack Nathan Medical designs, builds and sets-up barrier-free medical and dental clinics for physicians in high-density centers.

Jack Nathan Health was established in 2006 and continues to expand its international footprint, delivering exceptional, state-of-the-art, turn-key medical centres in 76 Walmart locations across Canada including British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec, as well as six locations in Mexico.

Jack Nathan Medical designs, builds and sets-up barrier-free medical and dental clinics for physicians in high-density centers. The construction costs are subsidized by Walmart and Jack Nathan does not pay rent on these locations. Jack Nathan simply collects a fixed licensing fee of roughly ~$100k for every in-store location. Here is an example of what Jack Nathan Medical Centers look like. These are not prototypes. This is an established business and these are photos of actual Jack Nathan in-store clinics located in Walmart centres across Canada and SuperMart (owned by Walmart) in Mexico.

Traditional clinics have been 1700 sq. ft. on average. while new clinics will be 4,000-8,000 sq. ft. to allow for ancillary services, creating a “one-stop-shop” medical experience. The focus is on convenience, consistency, professionalism. Revenue per square foot will increase as a result due to the ability to provide more services that come with higher margins.

Comparison to the DOC/WELL Model

The primary difference is that Jack Nathan operates like a franchise model, meaning they take a licensing fee on every location. SO, they do not employ and take revenue from the doctors directly which is what DOC and WELL does. That is why in the investor presentation you will see that the opportunities for growth here are in international expansion, specifically in Mexico, where there are over 2500 Walmart/Supermart locations and JNH is currently only operating in 6 of them. Revenue per store location is currently around $93k but will increase as the company builds more ‘large’ versions of their clinics.

Let’s do some quick napkin math…. In Canada, JNH already operates in 76/408 Walmart stores, but in Mexico they only operate in 6/2500 stores. These 82 store locations are bringing in roughly $7.7 million in bottom line revenues and EBITDA margins of 25%, so EBITDA of ~$1.8 million.

For expansion, if they can tap into 20% of all Canadian and Mexican locations, that would be ~800 in-store locations with annual licensing revenue of $80million. With EBITDA margins increasingly steadily to 25%, EBITDA be closer to $27.6 million. Although, it will be a long road to 800 store locations, we believe this is a reasonable target given the opportunities in Mexico. Fortunately, the construction cost and rent is subsidized by Walmart.


We have built a quick revenue/EBITDA forecast and valuation model for JNH. Currently, the company is operating 82 total stores with $7.7million in annual revenue, so ~$93k per location.

There are opportunities to enhance sales and profitability with digital integration and revenue will also increase due to their ability to provide more services that come with higher margins. Thus, we assumed that revenue per location will increase gradually to $115k/store in 2022. For the last few years, EBITDA as a % of Revenue has increased gradually to around 23%. We expect this trend will continue moving forward. So we assume EBITDA as a % of revenue will increase gradually to 28% in 2022.

We also assume that the company’s growth strategy will focus on expansion via additional in-store locations, ultimately reaching 800 in-store locations by 2025. We believe that this is possible, and is part of the reason for the company’s decision to go public, which gives them access to a larger pools of capital that will enable them to ramp up their international expansion plans.

If Jack Nathan is able to execute on their plans and meet the targets outlined in these assumptions then the stock price would be valued closer to $4.42 per share, compared with the $0.50 IPO price. This is our 5-year conservative estimate.

One risk factor to keep in mind is that the future of the company is heavily reliant on their strategic partnership with Walmart. If for some reason their relationship with Walmart deteriorates, then the company will find themselves in big trouble.


Jack Nathan went public through a capital pool shell, Woodbridge Ventures Inc. PI Financial and Regent Capital Partners (with Canaccord and Eight Capital) completed a $5.6m oversubscribed financing for JNH in July that involved the issuance of Units at $0.50 each with a half warrant exercisable at $0.75 for two years (with an acceleration provision at $1.00).  The CPC used for the Qualifying Transaction, Woodbridge Ventures, was rolled back 1:3 so the $0.10 IPO shares now have a cost base of $0.30. The company has no outstanding debt. Below is an updated cap table for Jack Nathan Health.


  • Strategic 14 year relationship with Walmart; Co-locating at Walmart locations – JNM currently operates 76 clinics in Canada and 6 in Mexico, with many more under development, servicing 1.5 million+ patient visits annually

  • JNM clinics increase prescription sustainability for Walmart pharmacies and increase foot traffic at Walmart stores through additional service offerings

  • Rapid international expansion with Walmart (China/UK/Chile/Japan)

  • Doctors are graduating with significant debt and lack of business acumen to operate a clinic and attract new patients

  • JNM recruits new doctors/service providers and covers all facility and personnel licensing, allowing them to operate their practices

  • Walmart provides access to high traffic facilities

  • Doctors pay an upfront license fee upon signing and a monthly flat licensing fee per square foot

  • Additional operators (lab, chronic pain, weight loss, dental, physio, etc.) allow for additional upfront license fees and additional monthly flat licensing fees

  • Traditional clinics have been 1700 sq. ft. on average. New clinics will be 4,000-8,000 sq. ft. to allow for ancillary services, creating a “one-stop-shop” medical experience. Focus on convenience, consistency, professionalism.

  • Revenue per square foot will increase as a result due to the ability to provide more services that come with higher margins

  • Construction of clinics is subsidized by Walmart. JDH pays little to no rent and also receives a subsidy from Walmart.

  • Developing in-house technology that will drive engagement, data collection and new service offerings, with a vision of having one platform offering telemedicine, wholesale procurement, access to clinical trials and more, providing a “vertically integrated” servicing offering to patients either virtually or in-clinic

  • Integrating technology with Walmart

  • JNH has been cash-flow positive for the last 10 years…

  • 2018A – $821,856 EBITDA on revenues of $2,925,163

  • 2019A – $1,073,648 EBITDA on revenues of $3,560,195

  • 2020E – $1,799,590 EBITDA on revenues of $7,707,093

INVESTOR PRESENTATION: https://s26.q4cdn.com/651907515/files/doc_presentations/Jack-Nathan-Health-Investor-Deck-October-2020-Final-v4.pdf



- SmallCapInvestor


DISCLOSURE: Author owns shares of Jack Nathan Medical and may choose to buy or sell at any time without notice. Author did not receive any compensation for publishing this article. 

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