Pharmacy software specialist, System Solutions, has bought rival Medicom in a cash and shares deal valuing the business at up to €10 million.
The pair announced yesterday that Systems Solutions had acquired a majority stake in Medicom.
The combined business will have revenues of more than €10 million and this is projected to rise to €20 million in the medium term.
They did not reveal a sale price for Medicom. However, it is understood that it was a combined cash and share deal, which valued the company at between €5 million and €10 million.
The cash element of the deal was split between shareholders Davy Stockbrokers BES investors and Bank of Ireland Venture Capital. Individual shareholders were given a stake in the new enlarged entity.
According to Companies' Registration Office (CRO) returns, shareholders included Medicom directors, Howard Beggs and Maeve Kelly. Mr Beggs will take over as chief executive of the new operation. David Raethorne, Systems Solutions technical officer, will become chief technical officer of the new business.
Both companies provide software and related services to pharmacies, doctors and dentists.
Mr Beggs said yesterday that the merger would create an integrated business that would electronically connect their clients, who are all in the business of providing primary healthcare. It has over 10,000 clients.
The enlarged System Solutions will have a bigger customer services function and will be able to offer enhanced programming and development to its customers.
Systems Solutions has been working with State agency Enterprise Ireland's scaling division, which is focused on getting small Irish businesses to grow, and achieve "scale", which the body defines as sales of €20 million a year.
Systems Solutions said yesterday that the Medicom takeover was a significant step on that road. Management believes it should hit the €20-million-a-year turnover target in a few years.
Patricia McLister of Enterprise Ireland welcomed the deal yesterday.
The enlarged company has pledged to spend €750,000 a year on research and development.
Mr Raethorne said yesterday: "We plan to develop and deliver next-generation, cutting-edge technology that will make the Irish primary healthcare sector an international model of excellence."
