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Tuesday 08 June 2021

Craneware set to double size with $400m Sentry acquisition

Craneware logoAIM-listed Scottish provider of software to the US healthcare market, Craneware, is adding immediate scale and enhancing its pharmacy offering with plans to acquire Florida-based Sentry Data Systems for $400m. The strategic acquisition, which is subject to anti-trust clearance in the US, is being satisfied with $312.5m in cash and $87.5m in shares and is expected to complete by Q3 2021. 

In a related move, Craneware has also announced the successful placing of 6.2m new shares to existing and new institutional investors at an issue price of 2,200 pence/share, raising approximately £136.2m. Issued at a c.10% discount to the closing mid-market price yesterday, the new shares represent c.23% of the company’s current share capital.

Sentry is a major acquisition for ambitious Craneware, which will more than double the size of the business. The privately-held business generated revenue of $92m and adjusted EBITDA of $23m in the year to 31 Dec 2020, whilst Craneware turned over $71m in its FY20 to end June. 

The rationale for the acquisition is clear. As well as adding scale, it will expand Craneware’s coverage of US hospitals and enhance its pharmacy offering. Sentry provides SaaS-based solutions that simplify pharmacy procurement, utilisation and compliance, as well as BI and analytics software and consulting services. With pharmacy being the second largest cost centre for hospitals after the workforce, Craneware rightly sees this as an important area for US hospital management teams as they look to improve margins and cut costs based on insight from the data it provides.

There are also significant cross-selling opportunities - Sentry’s 10,000-strong customer base comprises hospitals, pharmacies and clinics and includes 600 US hospitals, only 35% of which overlap with existing Craneware customers. Interestingly, Craneware is also planning to further enhance its Trisus product suite using the 147m longitudinal patient records that Sentry has collected over a 17-year period. 

Posted by: Tola Sargeant at 09:35

Tags: acquisition   software   healthcare   pharmacy  

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