Healthcare

Alcidion expands UK footprint

Tue 07 Dec 21, 3:25pm (AEST)
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Key Points

  • Offer price of $0.25 per new share represents a 21.9% discount to the last close price of $0.32.
  • Alcidion's 38 NHS Trusts implies a circa 26% UK market presence.
  • The stock has jumped by around 50% in the last 52-weeks.

Healthcare software company Alcidion (ASX: ALC) has acquired UK-based Silverlink PCS Software Limited (Silverlink) for $55.5m.

One of the largest specialist Patient Administration System (PAS) providers servicing the UK NHS market, Silverlink is expected to expand the company’s overall product offering.

The acquisition is also expected to position Alcidion to become a cloud-native, modern, and modular Electronic Patient Record (EPR/EMR) provider.

The latest purchase is expected to be funded via a $55m equity raising, comprising a placement to institutional and sophisticated investors of $30m, and a 1 for 10.5 accelerated non-renounceable entitlement offer to raise $25m.

The equity raising will be conducted at an offer price of $0.25 per new share (Offer Price), which represents a 21.9% discount to the last close price of $0.32.

UK expansion

Alcidion’s latest UK-based acquisition also expands the company’s UK presence to 38 NHS Trusts, which the company’s notes implies a circa 26% market presence - while also expanding the total addressable market.

Commenting on the acquisition, managing director Kate Quirke expects the combination of the company’s Miya Precision clinical platform with the Silverlink PAS product to reinforce the company’s commitment to the UK market.

“Together we will support the open availability of data to ensure our healthcare systems are well equipped to address the challenges ahead - these aligned objectives make this partnership a perfect fit.”

Around 95% of Silverlink’s revenue is recurring with Silverlink management forecasting FY22 revenue (30 April year-end) of $7.8m and earnings of $4.8m.

While the stock has jumped by around 50% in the last 52-weeks, it remains at a significant discount to its early-July peak of $0.46.

Broker coverage on the stock is minimal.

Canaccord Genuity has a Strong Buy rating on the stock, and Morningstar has a fair value of $0.40.

Written By

Mark Story

Editor

Mark is an award-winning investigative financial journalist and editor who started his career working for Marathon Oil in London. He has a degree in politics/economics, a diploma in journalism and has completed the Institute of Directors course. Mark has worked on 70-plus newspapers and financial publications across Australia, NZ, the US, and Asia including: The Australian Financial Review, Money Magazine, Australian Property Investor and Finance Asia. Mark is passionate about improving the financial literacy of all Australians through the highest quality content.

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