Healthcare software developer EMIS Group has acquired a London technology business for an initial £2.5m and purchased the outstanding minority stake in a subsidiary.
EMIS, who are based in Yeadon, announced a deal for Dovetail Digital Ltd, t/a Dovetail Lab, a technology business specialising in blockchain software for the healthcare market. Schofield Sweeney acted on behalf of EMIS in respect of the acquisition of Dovetail Digital (Martin Sweeney and Jessica Fielden) and the outstanding minority stake in RX Systems (Steven Millward and Lucy Holroyd).
The acquired business is expected to generate revenue of about £900,000 and a small operating loss during its first full year of operation in 2018. The team, based in London, will join EMIS Group as part of the acquisition, including Dovetail Lab's chief executive and co-founder Alexandra Eavis.
EMIS Group is acquiring an initial 90 per cent shareholding in Dovetail Lab on a cash and debt free basis for £2.5m, comprising £1.5m in cash payable immediately and £1m in EMIS Group shares to be issued on successful product delivery milestones. Up to £2.5m of further consideration may be payable on the attainment of certain business plan targets in 2019, 2020 and 2021.
Andy Thorburn, chief executive of EMIS Group, said: "This is a very exciting acquisition for the Group, with Dovetail Lab widely regarded as one of the leading healthcare blockchain businesses in the UK, that is driving innovation across the sector.
"The business has already launched a successful pilot of its software within the NHS, giving patients access, visibility and control over their health data using explicit and informed consent to drive data sharing across all health and care settings. The potential applications for blockchain technology in the UK healthcare sector are significant and we look forward to working with the new team to explore these."
EMIS has also acquired the outstanding minority stake in its subsidiary Rx, which trades as EMIS Health Community Pharmacy, giving it 100 per cent control of the business.
The 21.1 per cent minority stake was acquired from pharmaceutical wholesale Phoenix Medical Supplies for £8m. Prior to completion, Rx paid a dividend to its shareholders of £19m from its accumulated reserves, of which £4m was paid to Phoenix with the balance retained within the group.
For the year ended 31 December 2017, Rx contributed revenues of £21.9m and a segmental operating profit of £5.6m to the group.