EMIS buys Rx stake in £10m deal
HEALTHCARE software supplier EMIS has taken a majority shareholding in pharmacy IT provider Rx Systems in a deal worth almost £10m.
Rawdon-based Emis said the acquisition of Rx was a “unique strategic opportunity” for the company to develop its presence in another sector of the healthcare IT market.
Rx has secured more than 20% of the pharmacy IT market since it began trading in 2004 and recorded pre-tax profits of £1.5m on the back of revenues of £9.97m for its last full year.
EMIS is buying a 78.9% stake in the firm from shareholders including company founders Ian Taylor and Simon Ward who are the current managing director and technical director of Rx. The remaining stake will continue to be owned by pharmaceutical wholesaler Phoenix Medical Supplies, a major Rx customer.
EMIS chief executive Sean Riddell said: “Since inception Rx has made rapid progress in penetrating the pharmacy market, demonstrating superior customer service levels and a commercial and innovative approach to its product offering.
“The opportunity to purchase a majority stake in Rx fits perfectly with our strategy of supplementing organic growth with diversification through acquisitions, where felt appropriate, into related areas of healthcare IT. We look forward to working with the management team to take the company forward as we build our ‘joined-up healthcare’ proposition.”
The deal will be funded through an initial cash payment of £8.3m with a further £700,000 coming from the issue of new ordinary shares in EMIS. Another £950,000 will be payable depending on Rx’s operating profits over a 17 month period after the deal.
Mr Taylor will continue as Rx’s managing director while Mr Ward will remain with Rx in a consulting role for the next 18 months.
EMIS Group was advised on the deal by a team from the Leeds office of law firm Cobbetts.
Corporate partner Guy Jackson said: “The acquisition of Rx Systems follows EMIS Group’s core strategy to grow the business organically and through acquisition. The service offering of Rx Systems will also complement EMIS Group’s existing presence in the online and mail order pharmacy sector.
“Following the recent white paper on reforming the NHS, pharmacies are likely to play an increased role in the provision of localised health services. IT management systems, such as those provided by Rx Systems, will enable pharmacies to work more efficiently to deliver these services and meet the rising demand and expectations placed upon them.”
In addition to Mr Jackson, the Cobbetts team included corporate partner Daniel O’Gorman and corporate associate Abbie Robinson.
