Edinburgh-based Craneware, a provider of software for the US healthcare market, said late on Monday it agreed to acquire Florida-based Sentry “for an aggregate consideration of $400 million.” 

Craneware also announced it will sell shares in a proposed placing to institutional investors to raise $199 million to help fund the acquisition.

The placing shares are expected to represent 23% of the company’s current issued share capital.

Craneware said Sentry is the ultimate holding company of Sentry Data Systems, Inc., a private company headquartered in Deerfield Beach, Florida, which is a “provider of SaaS solutions which simplify the complexity of pharmacy procurement, utilisation and 340B regulatory compliance in order to maximise cost savings, improve patient outcomes and ensure precise regulatory compliance.”

It said Sentry also provides business intelligence and SaaS analytics solutions and consulting services.

Sentry has a customer base of 10,000 hospitals, pharmacies and clinics, including over 600 US hospitals, of which only 35% overlap as existing Craneware customers.

Sentry generated revenue of $92 million and adjusted EBITDA of $23 million (unaudited) for its financial year ending December 31, 2020.

“The consideration for the acquisition is being satisfied as to $312.5 million (as adjusted) in cash and as to $87.5 million by the issue of shares in the company to the vendor of Sentry …” said Craneware.

“The cash consideration will be funded from the group’s existing cash resources, a new debt facility of up to $140 million … and the net proceeds of an equity placing …”

Craneware CEO Keith Neilson 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.“