System C Healthcare PLC ("System C") (AIM:SYS), the provider of specialist IT products and services to the healthcare sector announces a significant strategic step into the private healthcare market with the acquisition of IQ Systems Services Ltd ("IQ") for a maximum consideration of £2.16m.
IQ is a leading supplier of patient management and clinical software solutions for private treatment centres and hospitals. Its IQUtopia product is highly regarded in the private healthcare marketplace and has been deployed at a number of the most prestigious private sector treatment centres in the country including Sussex Orthopaedic NHS Treatment Centre, Will Adams NHS Treatment Centre (Gillingham), St Marys NHS Treatment Centre (Portsmouth), Midlands NHS Treatment Centre (Burton) and Eccleshill NHS Treatment Centre (Bradford) amongst others. IQUtopia complements System C's MedWay Patient Administration and Electronic Patient Record (EPR) software, which is typically deployed into larger NHS Acute Trusts.
The acquisition of IQ accelerates System C's expansion into the private healthcare market as well as strengthening its product portfolio. IQ's customers include a number of major private healthcare providers including Mercury Healthcare (acquired by Care UK in April 2007), Centres of Clinical Excellence ("CCE") and Nations Healthcare (acquired by CCE in June 2007).
The consideration for the acquisition is £0.8m in cash on completion, with up to a further £1.36m payable in a mixture of cash and shares over the next 2 years dependent on the achievement of performance targets. The cash element of the consideration is to be funded from the Groups existing resources. In the year to 31 December 2006, IQ reported turnover of £0.9m, normalised PBT of £0.15m and, as at 31 December 2006, had Gross assets of £0.25m. The board expects the acquisition to be earnings enhancing from day one.
System C's Chief Executive, Ian Denley, commented: "We are delighted that IQ has chosen to become a fully integrated part of the System C business. We believe that the role of the private sector in most major health economies will be become increasingly important over the medium term, and with its significant customers and an established and well thought of product, the acquisition of IQ enables System C to expand directly into the private healthcare provider market.
We will work closely with IQ to enhance IQUtopia, strengthen the professional services available to IQ customers, and further expand the strategic relationship with their clients."
John Wyatt Barton, Co-director of IQ, highlighted the product and services synergies between the companies: "Working with System C will open up many new opportunities for us. Their professional services capability and their scale are just what our clients have been asking for and they have key products which complement IQUtopia. There is a tremendous cultural fit between the two companies and we look forward to working in close collaboration to meet the exciting new opportunities ahead."
About System C Healthcare PLC
System C Healthcare PLC (www.systemc.com), established in 1983, specialises in the provision of information systems and solutions to the healthcare sector. Its staff have an average of 15 years' healthcare experience and can provide all aspects of systems design, development and deployment services. System C is founded upon the belief that IT solutions, when effectively implemented, can significantly contribute towards improving patient care.