Alcidion expands UK footprint

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.