A Scottish healthcare data giant has acquired a US pharmaceutical company for £282m in a bid to expand its presence in the US.
The new deal with Florida-based Sentry – a leading provider of software-as-a-service (SaaS) solutions as well as business intelligence and consulting services – represents “a compelling strategic fit” for Craneware, by enhancing the group’s focus on pharmacy operations within healthcare providers.
Sentry has a customer base of some 10,000 hospitals, pharmacies and clinics, including over 600 US hospitals, of which just 35 per cent overlap as existing Craneware customers. It generated revenue of $92m (£65M) for its financial year ending 31 December 2020.
According to the Edinburgh-headquartered firm, Sentry’s SaaS solutions – a web service that allows users to connect to apps over the internet – maximises cost savings, simplifies the complexity of pharmacy procurement, improves patient outcomes and ensures precise regulatory compliance.
Craneware produces software that collects, analyses, compares, verifies and corrects data so US hospitals can improve their financial and operational performance as well as patient outcomes.
It hopes to benefit from the strengths of Sentry’s SaaS business model which boasts recurring revenues due to its long-term customer relationships and high contract renewal rates.
The company also plans to take advantage of the “significant” cross-selling opportunities provided by the “complementary” nature of Sentry’s product suite and customer base.
Additionally, the deal poses a commercialisation opportunity to Craneware’s Trisus product suite, by way of Sentry’s 146m unique longitudinal patient records collected over a 17 year period.
Keith Neilson, chief executive of Craneware, 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.
“Sentry’s focus on the hospital link to community pharmacies adds breadth and depth to our healthcare data, providing extra insight into margin improvement opportunities within hospital operations and pharmacy costs in particular. As the second largest cost centre for hospitals after the workforce, this is an important area of focus for hospital management teams, as they seek to deliver greater value in healthcare.
“Sentry’s high levels of recurring revenues, customer retention rates, and strong financial metrics, speak to the quality of the business and the people that deliver their offering and we are excited by the scope of the opportunity ahead.”