The Alcidion Group Ltd (ASX: ALC) share price just hit an all-time high as the company made three separate, material announcements today.
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The Alcidion Group Ltd (ASX: ALC) share price is having a stellar day on Thursday. Today’s positive price movement comes after the company provided updates on a new acquisition, a new government contract, and a capital raising endeavour.
At the time of writing, shares in the health-focused IT company are trading for a record 37.5 cents – up 10.29%. By comparison, the All Ordinaries Index (ASX: XAO) is currently 0.66% higher for the day so far.
Let’s take a closer look at today’s announcements.
Alcidion share price surges
In separate statements to the ASX, plus an overarching investor presentation, Alcidion declared the following:
- The acquisition of ExtraMed, a UK National Health Service (NHS) patient flow software provider for $9.6 million cash.
- The awarding of a $21 million contract by the Australian Department of Defence for “a system that records, stores, aggregates and analyses health information for the Defence population.”
- A $17.9 million capital raise.
- An FY21 Q3 update.
Acquisition of ExtraMed
With the purchase of ExtraMed, Alcidion claims it will now be “the leader in the UK market for patient flow, adding nine NHS Trusts, six of which are new to Alcidion.” The statement says the company now has a 19% market share in the NHS system.
As well, before its purchase, ExtraMed signed a contract with Hitachi to build a “large-scale” fully integrated, hospital-wide digital command centre at Salford Royal Hospital.
Alcidion is forecasting the purchase will add an extra $2.7 million worth of revenue in FY22, and added earnings before interest, tax, depreciation, and amortisation (EBITDA) of $500,000.
Kate Quirke, Alcidion managing director, said:
This acquisition significantly strengthens our position in the UK and signals our commitment to this very important market.
The combination of our technologies, staff and customers establishes Alcidion as the UK market leader for patient flow and as a foundation platform for digital command centres.
In its second announcement, the company advised the Australian Government has awarded it a 5.5-year, $21 million contract for a health information system for the Department of Defence. Alcidion is part of a consortium of bidders who were awarded the contract. The $21 million valuation is Alcidion’s estimated share of the contract.
Alcidion will specifically provide an aggregation of data from “its consortium partners and other systems in the Defence environment…” via its Longitudinal Health Record system. The project is expected to commence in the last three months of 2021.
Ms Quirke said:
Alcidion is looking forward to working with the HKM project team to bring the negotiations to a successful conclusion so we may start this exciting and significant project for Defence.
Alcidion will issue 48 million shares at a price of 32 cents each to raise enough funds to cover the costs of the ExtraMed acquisition and to ensure “Alcidion has sufficient investment funds and working capital to continue its growth strategy.”
The issuing price represents a 6% discount to Tuesday’s close price.
This endeavour will raise approximately $15.4 million. The remaining $2.5 million will be raised via a share purchase plan. Eligible shareholders will be able to purchase additional shares (up to $30,000 worth) at the same price as the issuance (32 cents).
Finally, the company said it has earned $24.7 million of revenue so for this financial year. Of this, $3 million was earned during Q3. Revenue for FY21 is already 33% higher than the full-year results for the previous financial year.
Alcidion share price snapshot
Over the past 12 months, the Alcidion share price has increased 97.4%. In fact, just over the last 6 months, the value of the company has grown by 188%!
Alcidion has a market capitalisation of $366.6 million.
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*Returns as of February 15th 2021
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Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.