Alcidion has announced a $16 million acquisition which will give it reach into the UK for the first time

ALCIDION will buy fellow patient software companies MKM Health and Patientrack in a deal worth up to $16 million.

ALCIDION will buy fellow patient software companies MKM Health and Patientrack in a deal worth up to $16 million.

Adelaide-based Alcidion, which currently has a market capitalisation of $22 million, has told the ASX it will pay an initial $12 million for the two affiliated companies, made up of $10 million in shares valued at 5.05c each and $2 million in cash.

A further $4 million in shares would be paid after a year subject to revenue and earnings benchmarks.

MKM Health chief executive Kate Quirke will move to the CEO role of the enlarged group post-acquisition, while Alcidion chief executive Ray Blight will become executive chairman.

Alcidion is a health informatics company with products which help manage emergency rooms, inpatient and outpatient departments and aid decision making.

MKM provides IT solutions to healthcare providers across Australia and New Zealand and UK-based Patientrack is a supplier of healthcare software targeted at improving patient safety in hospitals.

MKM and Patientrack merged their UK businesses in 2011 and MKM is the latter’s sole distributor in Australia.

Alcidion said the acquisition would give it an entry into the UK market for the first time.

“This transformative acquisition creates a new and leading specialist health IT solution provider focused on ‘next generation’ decision intelligence and analytics technology designed for hospital and allied healthcare customers globally,’’ the company said.

“Patientrack and Alcidion’s existing Miya and Smartpage products will provide the expanded group with a strong foundation of complementary technologies.

“The acquisition expands Alcidion’s international and domestic footprint substantially with a diversified customer base including 20 National Health Service (NHS) hospitals in the UK — including the largest NHS trust — more than 50 Australian public and private hospitals, and Health Departments, and 11 District Health Boards covering more than 30 New Zealand hospitals.’’

Mr Blight said it would be a transformational deal for Alcidion.

“We are expanding our technology capabilities and our product offering, and the combined group will also have the specialist health IT sales, advisory and service delivery capabilities that are required to sell and deliver complex healthcare IT platforms.

“We believe the acquisition creates valuable synergistic opportunities for both companies and is expected to increase Alcidion’s earnings, on a per share basis, in the first full year of ownership.”

An extraordinary general meeting is expected to be held in early June in order to seek approval for the issue of the new shares.

Alcidion shares were steady on 3.6c.

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