Less than a year after hitting the ASX-boards, small cap healthcare tech company PKS Holdings has lived up to its IPO promise that it would actively look to make acquisitions.
The $16 million company has inked an agreement to acquire software-as-a-service healthcare business Pavilion Health, in an all scrip deal that values the target at $8.5 million.
Pavilion shareholders will be issued 65.2 million new PKS shares as part of the deal, about 35 per cent of the company post acquisition.
Pavilion is a cloud-based software company that provides audit, risk and consulting software services to hospitals and health bodies. Its customers include 550 hospitals in Australia, owned by the likes of listed giant Ramsay Health Care and private player Healthscope.
Established in 2007, Pavilion generated $4.37 million in sales in the 2019 financial year and earnings of $1.66 million.
The acquisition by PKS is no surprise given the seasoned private equiteers sitting on its board.
There’s Mike Hill and Neil Broekhuizen from Ironbridge, Potentia Capital’s Andy Gray and Brad Lancken from Liverpool Partners.
As part of the deal, Broekhuizen will retire from the PKS board and former Pavilion chairman Stephen Borness will join.
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PKS said it would be looking to combine its software products with Pavilion’s to create a more compelling value proposition to potential customers and also facilitate cross-selling and upselling.
PKS offers its customers a clinical decision management system, which uses patient data and clinical expertise to deliver patient-specific reports, recommendations and alerts.
Its shares were trading up as much as 35 per cent on Tuesday, around 18¢.
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