- Medical imaging software specialist Mach7 Technologies (M7T) is buying Canada-based Client Outlook for roughly $40 million
- Client Outlook offers complimentary tech to Mach7's imaging software through the eUnity platform
- eUnity is designed to give clinicians access to high-quality imaging scans anywhere and on any device, while Mach7's tech optimises the entire medical imagine process
- Mach7 said the "transformational" takeover massively increases its market opportunity, sales pipeline, and customer base
- The company has launched a $34.8 million capital raising plan to fund the purchase
- Shares in Mach7 are in a trading halt today, but last traded on June 9 for 79 cents each
Medical imaging software company Mach7 Technologies (M7T) is buying up Canada-based medical imaging specialist Client Outlook for $40 million.
The deal was announced the morning, under which Mach7 will take control of all Client Outlook shares for C$38.5 million (roughly A$40.8 million) cash.
To help fund the deal, Mach7 has launched a $34.8 million capital raising plan. The company will tap institutional investors for $3.7 million through a share placement, while retail investments will make up the remaining $31.7 million through a one-for-four entitlement offer.
All new shares issued under both the placement and entitlement offer will be priced at 68 cents, which is a 13.9 per cent discount to Mach7's last closing price of 79 cents.
The company said the funds from the capital raise will be used solely for buying up Client Outlook.
Why the buy?
At the forefront of the purchase is Client Outlook's eUnity enterprise image viewing tech platform.
Essentially, eUnity gives clinicians quick and easy access to high-quality medical images from anywhere in the world and on any device.
The clinicians can see the same high-quality images as the radiologist through the eUnity interface, which can be installed on computers, tablets, and mobile phones.
Mach7's tech, on the other hand, is designed to streamline the medical imaging process by optimising storage, workflow, patient management and more throughout a hospital's entire IT ecosystem. The eUnity tech, then, is highly complementary to Mach7's services.
In fact, Mach7 said the purchase completes its enterprise imaging solution offering and provides a unique enterprise-wide solution to the healthcare imaging market.
Importantly, Mach7 said the Client Outlook takeover increases its addressable market opportunity from US$750 million to US$2.75 billion. The company's sales pipeline is boosted by 56 per cent and contracted annual recurring revenues by 70 per cent thanks to the sale.
On top of this, Mach7 said the buy increases its customer install base by more than 150 per cent to roughly 150 customers.
Mach7 CEO Mike Lampron said today's deal is "truly transformational" for the company.
"We have observed the evolution of enterprise imaging and decided that now is the time to modernize the outdated PACS [picture archiving and communication systems] landscape," Mike said.
"As one organisation we can offer a modular PACS solution that combines the unique characteristics of a clinical vendor-neutral archive with powerful workflow features, a universal worklist and the industry gold standard zero-footprint enterprise and diagnostic viewer," he said.
Client Outlook CEO Steve Rankin shared similar sentiments, saying the combination of the companies' services will help them take the industry in a new direction.
"By combining our resources, we have a tremendous opportunity to accelerate our established medical imaging platforms that provide healthcare organisations the ability to quickly adapt and innovate," Steve said.
Steve will become Mach7's Chief Product Officer, while three other Client Outlook executives have also been brought on to the Mach7 team.
Mach7 shares are yet to come out of their June 9 trading halt. Shares last traded for 79 cents each in a $144.58 million market cap.