Alcidion Group to acquire MKM Health and Patientrack for $12m

Alcidion Group ASX ALC MKM Health Patientrack acquisition

Alcidion Group (ASX: ALC) will snap up MKM Health and it electronic observations platform Patientrack system, opening up the UK market to the group and allowing it to collect about A$13 million a year in revenue, based on financial year 2017 figures.

The South Australian group will pay A$12 million for its acquisition of the healthcare information technology company started in 2003 by three former Deloitte senior professionals.

In addition to buying up the Australia parent company MKM Health and its NZ subsidiary, also called MKM Health, Alcidion will grab its affiliate Patientrack Holdings and its UK and Australian subsidiaries, known as Patientrack from the current MKM Health and Patientrack shareholders.

Today, Alcidion chairman Ray Blight welcomed the opportunities both MKM Health and Patientrack would bring to the expanded group.

“We are very pleased to have entered into acquisition agreements to acquire the shares of MKM Health and Patientrack, both leading technology players in the healthcare sector,” Mr Blight said.

Based on FY2017 figures the combined group will collect A$13 million revenue on a pro forma basis, once MKM Health and Patientrack’s revenues of A$9.5 million and net profit after tax of about A$700,000 are added to the mix.

Next steps

Alcidion will pay both cash and shares to snap up MKM Health and its Patientrack connections.

The group has agreed to pay MKM Health about 198 million ordinary Alcidion shares, in a transaction it valued at $10 million, based on a premium price of A$0.0515 a share.

Alcidion will also serve up A$2 million of its cash reserves.

The group said the acquisition created immediate cross-selling opportunities, with potential for Alcidion’s patient management system Miya and clinical messaging system Smartpage to be sold into the European market.

Alcidion tipped the acquisition would expand its footprint across the globe, as it added 20 National Health Service hospitals in the UK to its client list, more than 50 Australian hospitals and 30 New Zealand district health boards and health departments.

In 12 months the group has also agreed to pay $4 million in Alcidion shares at a A$0.0505 issue price if MKM Health and Patientrack meet revenue and earnings-before-interest-and-tax targets.

Alcidion securities were unchanged at A$0.036 by late morning today.

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