The booming demand for the services provided by Telstra’s health business is believed to have prompted the telecommunications provider to consider more acquisitions for the business unit, and one target that is likely to make sense is Medical Director.
A sales process for Medical Director was underway before COVID-19 but was placed on hold at the onset of the virus.
Telstra has looked at the business before.
It is now believed to be looking at acquisitions and its healthcare unit is an area where it is believed the country’s largest telecommunications provider would be eager to lift its presence.
Working on the sale for owner Affinity Equity Partners is advisory firm Jefferies Australia.
Last year, the software provider generated about $30m in annual earnings before interest, tax, depreciation and amortisation and the thinking then was that the business could sell for 15 to 20 times its earnings.
That was before COVID-19, which would have likely shifted its performance considerably.
Under the spotlight during the Medical Director sales process last year was the company’s contract with NHS in Britain and how much it would generate for the operation.
Medical Director won the contract last year to provide its Helix cloud software to UK-based general practitioners.
Its software is used by more than 20,000 clinicians each year and its platform processes more than 70 million patient consultations.
Affinity Equity is known for commanding top dollar for the companies within its portfolios. It bought Medical Director in 2016 for $155m from Healius, then named Primary Health Care.
This year it secured an eye-watering $1.3bn for its Australian ticketing company that owns Ticketek, TEG Group.
It also sold its 35 per cent stake in the Velocity frequent flyer program to Virgin Australia last year for $700m, valuing the overall business at about $2bn.
Telstra said while delivering its results that it was strategically well placed to grow in the COVID-19 market.
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