Edinburgh's Craneware hails merits of bumper US takeover as sales gather pace
Craneware, the Edinburgh-headquartered software firm focused on the US healthcare market, has flagged “positive” sales activity and said the integration of Sentry Data Systems was progressing ahead of plan.
The Scots group sealed the bumper $400 million (£283m) takeover of Sentry in June, raising millions from investors to help fund the “strategically important” deal.
The US company, headquartered in Deerfield Beach, Florida, has a customer base of some 10,000 hospitals, pharmacies and clinics, including more than 600 US hospitals.
Releasing a trading update to coincide with its annual shareholder meeting, Craneware noted that the integration of Sentry was progressing ahead of plan, with the combination of operational departments and systems nearing completion and the sales and technology teams on track to be fully integrated by the end of the current financial year.
It added: “Good levels of initial synergies have already been realised, more than fully mitigating the salary inflation currently being seen across the industry.
“Morale in the enlarged group is strong with a collective passion to ‘transform the business of healthcare’ resulting in a lower attrition rate than the industry average widely reported.”
The firm, which is headed by chief executive Keith Neilson, said the acquisition of Sentry had significantly increased its scale and opportunity, expanding the group's pharmacy offerings, customer base and “valuable data sets”, as well as increasing total revenue visibility for the next three years to some $500m.
Craneware added: “Sales activity is high, with initial cross-sale opportunities emerging, as anticipated, across the two customer sets alongside new customer opportunities.
“The migration of existing customers to the Trisus platform continues to plan with all customers expected to be migrated by the end of calendar year 2022.
“With a strong balance sheet, high levels of visible revenue and strong customer retention rates, Craneware has a strong financial foundation from which to accelerate growth and to fulfil its potential, thereby increasing shareholder value. The board is confident in the continued strong performance of the business.”
Founded in 1999, Craneware is headquartered in Edinburgh, with offices in Atlanta and Pittsburgh, employing hundreds of staff.
Unveiling the acquisition of Sentry Data Systems earlier this year, Neilson said the deal would provide “immediate additional scale” to its operations.
The group pointed to a number of benefits arising from the deal, including the enhancement of its focus on pharmacy operations within healthcare providers and “significant cross-selling opportunities”.
Neilson said: “The acquisition of Sentry will provide immediate additional scale to our operations, expanding our coverage of US hospitals, enhancing our pharmacy offering and cementing Craneware’s position as a leading provider of value cycle solutions to the US healthcare market.”
The deal was funded by $312.5m in cash and $87.5m through the issue of shares in the company to the vendor of Sentry.
The cash consideration was funded from the group’s existing cash resources, a new debt facility of up to $140m and the net proceeds of an equity placing. That placing successfully raised gross proceeds of about £136.2m.
About 40 per cent of registered US hospitals are now customers of Craneware.