1st Nov 2018 09:36
LONDON (Alliance News) - Healthcare software firm EMIS Group PLC said Thursday acquired a majority stake in patient record firm Dovetail Digital Ltd and the remaining stake it did not own in pharmacy software unit Rx Systems Ltd.
EMIS will pay an initial GBP2.5 million to acquire a 90% stake in blockchain-focused Dovetail which uses the technology to give patients full control of their healthcare records. Of this, GBP1.5 million will be payable in cash and GBP1.0 million in EMIS shares.
Up to a further GBP2.5 million consideration may be payable on the attainment of business plan targets in 2019, 2020 and 2021.
The acquisition is in line with its strategy of " identifying sustainable long-term market opportunities delivering connected healthcare systems," the firm explained.
Founded in July 2017, Dovetail expects to generated GBP900,000 in revenue with a "small" operating loss in its first full year of operation in 2018.
Dovetail Chief Executive Officer Alexandra Eavis also will join EMIS in the deal. The remaining 10% stake in the firm will be retained by existing shareholders. EMIS will have a call option over this remaining stake which will be exercisable between 2023 and 2025.
"This is a very exciting acquisition for the group, with Dovetail Lab widely regarded as one of the leading healthcare blockchain businesses in the UK, that is driving innovation across the sector," EMIS Chief Executive Officer Andy Thorburn said.
"The business has already launched a successful pilot of its software within the NHS, giving patients access, visibility and control over their health data using explicit and informed consent to drive data sharing across all health and care settings," Thorburn added. "The potential applications for blockchain technology in the UK healthcare sector are significant and we look forward to working with the new team to explore these."
In a separate announcement, EMIS acquired the remaining 21.1% stake in Rx it did not already own from pharmacy owner Phoenix Medical Supplies Ltd for GBP8.0 million in cash. The deal will be funded with existing resources.
Rx will now be wholly-owned by EMIS. EMIS acquired its initial 78.9% stake in Rx in 2010.
Prior to completion, Rx paid a GBP19.0 million dividend to shareholders of which GBP4.0 million was received by Phoenix. The remainder will be retained in the business.
"Rx has been an important contributor to EMIS Group since 2010 and Phoenix a valued partner, co-investor and customer throughout that period," Thorburn added.
In 2017, Rx contributed GBP21.9 million in revenue and GBP5.6 million sentimental operating profit to EMIS. In total, EMIS generated GBP37.4 million in adjusted operating profit on revenue of GBP160.4 million.
EMIS expects the deal to be immediately earnings enhancing.
"We are pleased to have come to this agreement and to consolidate full control of Rx which, as the market-leading community pharmacy solution, remains central to the group's strategy of providing connected healthcare software and services across every major UK healthcare setting", Thorburn continued.
Shares in EMIS were up 0.6% at 910.20 pence on Thursday.
Related Shares:
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