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Craneware in $400m US pharmacy knowledge deal – Day by day Enterprise

Keith Neilson: “Instant Additional Scale”

Craneware, the Edinburgh-based data analytics company focused on the US healthcare market, is to acquire Florida-based Sentry Data Systems in a cash and equity deal for $ 400 million (£ 282 million).

Sentry is a provider of SaaS solutions that simplify the complexities of pharmacy procurement. It also offers business intelligence and consulting services.

It has a customer base of approximately 10,000 hospitals, pharmacies and clinics, including more than 600 US hospitals.

Sentry had revenue of $ 92 million and Adjusted EBITDA of $ 23 million (unaudited) for the fiscal year ended December 31, 2020.

Headquartered in Canon Mills, Craneware supplies software that collects, analyzes, compares, verifies and corrects data so that US hospitals can improve their financial, operational and patient outcomes.

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The consideration for the acquisition will be settled in the form of $ 312.5 million (adjusted) in cash and $ 87.5 million in the issuance of shares in the company.

The cash contribution will be funded from the Group’s existing cash and a share placement with institutional investors that will raise approximately $ 140 million.

The placement price is set at the end of the book build. The placement shares are expected to represent approximately 23% of the company’s current issued share capital.

A number of Craneware directors and management, including CEO Keith Neilson and CFO Craig Preston, intend to purchase shares totaling £ 270,000.

Mr. Neilson said, “The acquisition of Sentry will immediately grow our operations, expand our US hospital coverage, enhance our pharmacy offering, and cement Craneware’s position as the leading provider of value-cycle solutions to the US healthcare market.

“Sentry’s focus on the hospital connection to public pharmacies expands our health data and offers additional insights into the possibilities for margin improvement in hospital operations and especially into pharmacy costs.

“As the second largest hospital cost center after workforce, this is a key area of ​​focus for hospital management teams to drive greater value in healthcare.

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“Sentry’s high recurring sales, customer retention rates and strong financial metrics speak for the quality of the company and the people who offer their offerings, and we are excited about the scope of the opportunities.”

Goldman Sachs International, Peel Hunt, Investec, Berenberg and Gossler & Co. act as joint bookrunners.

The stock closed unchanged on Monday at 2,450 pence.