Thursday, 16 July 2009

System C plays its part in healthcare consolidation.

(By Anthony Miller – Thursday 16th July 2009 8:40am). It’s not only Advanced Computer Software that sees the UK healthcare IT sector as ripe for consolidation (see ACS buys Staffplan). True to the M&A intentions expressed in its June trading update (see System C still looking healthy), AIM-listed healthcare systems provider, System C, has snapped up Leeds-based Liquidlogic, which provides ‘multi-agency software solutions’ to the public sector. System C will pay up to £14.2m cash (including £4m deferred), funded by a £12m placing just completed at 48p a share. System C’s shares closed at 46p yesterday, having topped 52p just after last month’s trading update.

This is System C’s fourth acquisition, following hard on the heels of that of RFID solution provider, Bluestar Group in May (see UK healthcare IT consolidation continues apace). System C paid £3m for Bluestar, which generated £200k PBT on £2.7m revenues. In its last reported FY, to 31st March ’08, Liquidlogic recorded £1.2m PBT on £6m revenues (+43% yoy!), and was running a 22% operating margin, hugely better than System C’s 14%. We don’t know how Liquidlogic fared over the past year, but if it was anything near prior performance, it sounds like System C made another very sensible buy.

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