PERTH software company Medepartner is building a national health technology business out of the ashes of Australian Stock Exchange-listed Startrack Communications.
Medepartner, which engineered a reverse takeover of Startrack earlier this year, has announced plans to change its name, raise $7.5 million in fresh equity and acquire two established businesses, including Perth-based Countrywide Injury Management.
Once the acquisitions are completed, it will have a national business with annual revenue of about $17 million and 200 staff across Australia.
Medepartner’s rapid growth coincides with another Perth company exiting the health technology sector.
Loss-making Australian Healthcare Technology has announced plans to sell its assets to Sydney-based IBA, which claims to be Australia’s leading provider of administration and financial systems to GPs.
AHT chairman Tony Trevisan flagged a possible trade sale in the company’s 2003 annual report, where he wrote that organic growth could be “ultimately the most lucrative” path for share-holders, but a trade sale “is clearly a recipe for quicker success”.
Both AHT and Medepartner saw an opportunity to deploy innovative technology to address the rising cost of servicing and administering the national healthcare system.
The big challenge facing these firms is winning acceptance from the slow-moving healthcare industry.
The planned new name for Startrack is Konekt, which managing director Carl Wood-bridge said symbolised one of its main objectives – to connect the many participants in the healthcare industry so they could share information and interact more efficiently.
A central ingredient in the business will be Medepartner’s software, which is designed to improve the efficiency of the workers compensation system.
To achieve rapid market entry it has agreed to purchase Countrywide Injury Management for about $5 million and Sydney-based Workplace Injury Management Services (WIMS) for about $11 million, payable in cash and scrip.
Mr Woodbridge said the company would “definitely” be seeking further acquisitions in the rehabilitation industry.
“It’s a cottage industry that needs to be rationalised,” he said.
“We have a policy of growing by acquisition and organically. We see these two companies as providing a platform for the future.”
The company aims to be the dominant provider of “employee health and return to work practices” for insurance companies and major employers in the private and government sector.
Specifically, its software can assist insurers deal with issues such as the high volume of paper-based transactions and an inability to benchmark the performance of service providers.
It also provides a mechanism for collection of data from medical providers in order to minimise paperwork, provide prompt payment and eliminate duplication of documents.
National insurance firm GIO, which is presently a co-owner of WIMS, will emerge as Konekt’s major shareholder with a 19 per cent stake.
Mr Woodbridge said he expected GIO to be a long-term shareholder.
“We struck them at a good time. They had a strategy of growing WIMS nationally and we were able to capture that and bring it into the business,” he said.
To help fund the acquisitions the company plans to raise $7.5 million through share placements to two institutions and to clients of broking firm Burdett Buckeridge Young.
The company will be strengthening its board of directors with the appointment of Paul Molloy as finance director.
Mr Molloy recently joined Medepartner as chief financial officer and previously was director of business and corporate services at St Luke’s Hospital in Sydney.
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