Health informatics company Alcidion Group (ASX: ALC) is seeing its investment decisions validated in full view after one of its future acquisition targets announced a series of revenue-boosting contract re-signings.
The news could potentially mean next month’s general meeting becomes a formality regarding the acquisition of MKM Health.
Alcidion agreed to acquire MKM Health and it electronic observations platform Patientrack last month.
With the ink barely dry on the contract, MKM’s Patientrack has announced that it has signed contract extensions with several of its existing clients representing a combined investment of A$890,000.
The UK-based company said it will remain as the preferred technology provider for four National Health Service (NHS) Trusts in England and Scotland, after the Manchester University Hospital, Bolton Trust, George Eliot Trust and NHS Fife in Scotland Hospital all extended their Patientrack licence and support contracts, for periods of one to three years respectively.
The Bolton Trust went further by announcing an expansion of its contract agreement.
Patientrack already has an extensive customer base with more than 80 hospitals in the UK and public and private hospital and healthcare groups in Australasia.
“These types of contract wins are exactly the reason we have entered into acquisition agreements with Patientrack and its affiliate, MKM Health,” said Mr Ray Blight, chairman of Alcidion.
Mr Blight added that “these sales are further evidence of the proven capability of the Patientrack customer base to generate sustained revenue over time and a platform across which new solution capability can be sold.”
According to Alcidion, its acquisition target Patientrack is a “complete digital and mobile bedside solution,” that’s proven to enhance patient safety. The firm also claims the digital solution can improve the quality and efficiency of care in “one easy-to-use application.”
Patientrack assists hospitals to improve patient care by planning and performing patient observations, assessments and clinical documentation at the bedside, thereby ensuring the early detection of various complications and deterioration among patients being monitored.
According to Alcidion, “the system is particularly effective for deteriorating patients and those at risk 24×7.”
In a medical pilot trial conducted in 2011 at the Royal Manchester Children’s Hospital, currently the UK’s largest children’s hospital, Patientrack was “externally validated showing significant reductions in length of stay, cardiac arrests and unplanned ICU admissions.”
Encouraging results and positive feedback of its platform has also helped The Royal Bolton Hospital to be named as Digital Hospital of the Month by UK Digital Health Age, a UK-based publication covering the health sector.
“It is really gratifying that we have been able to retain all customers who have chosen to invest in Patientrack over the last eight years. This is a significant show of confidence in the continued benefits that Patientrack is delivering to these sites,” said Mr Donald Kennedy, managing director of Patientrack.
Next gate to commercial revenues
In parallel to MKM Health and the Patientrack platform, MKM Health said it has entered into an agreement with NextGate Solutions, to become an authorised reseller of NextGate’s flagship Enterprise Master Patient Index (EMPI) and Provider & Organisation Registry software in both Australia and New Zealand.
The deal is expected to provide synergies for both companies with MKM Health saying that “this exciting agreement with NextGate will allow MKM Health to extend its scope of system integration and data management services offered to the Australian and New Zealand healthcare sectors,” according to its CEO, Ms Kate Quirke.
NextGate is a global leader in healthcare enterprise identification with the agreement expected to boost MKM’s revenues over time.
“Our agreement with MKM Health will greatly enhance and widen our market to help the global healthcare sector address their most challenging data sharing and patient identification issues,” said Mr Andy Aroditis, CEO of NextGate.
Given the encouraging commercial news coming from MKM Health today, Alcidion shares ticked up to $0.049 per share, up around 4% on the day.
However, its acquisition of MKM Health and Patientrack remains subject to Alcidion shareholder approval including required confirmation that the company can issue A$10 million of new shares.
An ‘extraordinary general meeting’ (EGM) of Alcidion shareholders has been scheduled for 14 June 2018 where it is hoped approval will be obtained, and for the prescribed acquisition deal to be given the green light.