Scottish firm pounces
Craneware in $400m US pharmacy data deal
Keith Neilson: ‘immediate additional scale’
Craneware, the Edinburgh-based data analytics company focused on the US healthcare market, is acquiring Florida-based Sentry Data Systems in a $400m (£282m) cash and shares deal.
Sentry is a provider of SaaS solutions which simplify the complexity of pharmacy procurement. It also provides business intelligence and consulting services.
It has a customer base of some 10,000 hospitals, pharmacies and clinics, including more than 600 US hospitals.
Sentry generated revenue of $92m and adjusted EBITDA of $23m (unaudited) for its financial year ending 31 December 2020.
Canon Mills-headquartered Craneware delivers produces software that collects, analyses, compares, verifies and corrects data so US hospitals can improve their financial and operational performance as well as patient outcomes.
The consideration for the acquisition, announced after the market closed on Monday, is being satisfied by $312.5m (as adjusted) in cash and $87.5m by the issue of shares in the company.
The cash contribution will be funded from the group’s existing cash resources and a share placing to institutional investors (update Tuesday: the placing raised £136.2m at a placing price of 2,200p, representing a discount of approximately 10.2% to the closing mid-market price of 2,450 pence per share on 7 June).
The placing shares are expected to represent approximately 23% of the company’s current issued share capital.
A number of directors and management of Craneware, including CEO Keith Neilson and CFO Craig Preston, intend to buy shares in the placing worth £270,000 in aggregate.
Mr Neilson said: “The acquisition of Sentry will provide immediate additional scale to our operations, expanding our coverage of US hospitals, enhancing our pharmacy offering and cementing Craneware’s position as a leading provider of value cycle solutions to the US healthcare market.
“Sentry’s focus on the hospital link to community pharmacies adds breadth and depth to our healthcare data, providing extra insight into margin improvement opportunities within hospital operations and pharmacy costs in particular.
“As the second largest cost centre for hospitals after the workforce, this is an important area of focus for hospital management teams, as they seek to deliver greater value in healthcare.
“Sentry’s high levels of recurring revenues, customer retention rates, and strong financial metrics, speak to the quality of the business and the people that deliver their offering and we are excited by the scope of the opportunity ahead.”
Goldman Sachs International, Peel Hunt, Investec, Berenberg and Gossler & Co are acting as joint bookrunners.
The stock closed unchanged at 2450p on Monday.