EMIS Group has conditionally agreed to acquire Ascribe Group, a software and IT services provider to the UK’s secondary healthcare market, from ECI Partners and certain other vendors for an initial enterprise value of GBP57.5m.
Ascribe was taken private by ECI from the AIM market in January 2009 in a GBP33m public to private transaction. This deal provides an initial consideration of GBP57.5m with further monies due contingent on short term performance. From the initial cash consideration alone, ECI has yielded a 2.1x return on its investment.
As part of this transaction, Numis Securities has placed 4,400,000 new ordinary shares of one pence each in the capital of EMIS Group at a price of 615 pence per new ordinary share, raising GBP27.1m (approximately GBP26.3m net of fees and expenses) to fund part of the consideration due under the acquisition.
Further cash payments of up to GBP3.0m may become payable in September 2014 contingent upon Ascribe achieving certain key operational and financial milestones in the 12 month period post acquisition. Such amount (to the extent payable) will be satisfied in cash out of EMIS’s available cash resources and available debt facilities at the time.
David Ewing, managing partner at ECI Partners, says: “We completed the GBP33m P2P in 2009 with a clear view that the post-NPfIT (National Programme for IT) HCIT market would be focussed on interoperable best of breed software. As such, Ascribe’s strategy was to invest heavily in software development to take advantage of this forecast market change. This has enabled Ascribe to deliver strong growth in software sales and orders as the market story has unfolded.
“Today’s sale represents another successful transaction for ECI, and marks our third exit in as many months which included the sale of CliniSys, the European market leading provider of software solutions to clinical laboratories. It further highlights our strong track record in creating and growing international market leading businesses in the TMT and healthcare sectors.
“We wish Stephen and the team at Ascribe every success in the future as it embarks on its next stage of growth and development with EMIS.”
Ascribe’s chief executive Stephen Critchlow says: “ECI have provided us with the support and guidance to help us grow our business in the UK and also to expand overseas. We look forward to working with EMIS to identify new markets and consolidate our position as a leading provider of healthcare IT.”
Adrian Reed, managing director at Altium who advised Ascribe shareholders, says: “Ascribe is a market leading healthcare IT business which Altium advised on the original ECI investment and have now delivered an outstanding exit event for all shareholders. The combination of Ascribe and EMIS will create a fully integrated suite of IT solutions to the NHS and their combined markets overseas and we wish them all the best on the next stage of their journey. We are delighted to have been able to deliver this result for management, ECI and all Ascribe shareholders and employees.”
