Shares in ASX-listed MedAdvisor have been placed in a trading halt today with the health-tech venture announcing plans to acquire US-based medication adherence company Adheris for US$34.5 million (AU$49m), while also raising AU$45 million to fund the acquisition.
The company’s seeking a minimum of AU$35m in funds through an institutional placement at $0.45 per share, a 12.5% premium to Friday’s closing price of $0.40 cents and a 10% premium to the 30-day volume weighted average price (VWAP). The raise also includes an accelerated non-renounceable entitlement offer and convertible note of US$5m (AU$7.1m) with Syneos Health. The deal includes a further US$7m in two-part earn out components based on revenues in: Q3/Q4 CY20 and CY21.
MedAdvisor (ASX: MDR) said it had entered into a binding agreement to acquire Adheris from Syneos Health in a deal that would make it the market leader for direct-to-patient medication adherence programs in the USA, with an addressable network of 180 million-plus patients – half the population – involving around 25,000 pharmacies, 57% of prescriptions in the US, and a network of 618k prescribers (60% in total). MedAdvisor formed a strategic partnership with Adheris last year.
The deal is subject only to successful completion of the institutional component of the equity raise. MedAdvisor has requested a four day trading halt plus two further days of voluntary suspension to complete the Placement and Institutional Entitlement Offer, with shares suspended from trade until November 10. Up to 161,115,297 new shares may be issued under the offer. Peloton Capital is the Lead Manager for the capital raise.
The company said HMS, MedAdvisor’s largest shareholder, is supportive of the transaction and will participate in the Entitlement Offer.
A Retail Entitlement Offer (REO) will open on November 13. MedAdvisor may raise up to AU$8.7m under the REO if shareholders take up their entitlements in full.
MedAdvisor CEO and MD Robert Read said medication non-adherence is a multi-billion-dollar global market with a lack of global players working to solve it.
“The US represents about 40% of the world’s medicines market and Adheris has the potential to reach 1 in 2 Americans through its opt out patient programs,” he said.
“The opportunity to acquire a strategically aligned scale provider, in the US, with whom we have already integrated our technology and go to market approach, we believe is transformational for MedAdvisor. This acquisition primes MedAdvisor to become a genuine global player with scale in medication adherence, helping millions of patients around the world improve their health outcomes.”
MedAdvisor said it may have to raise additional funds in the event that Syneos Health elects to redeem its convertible notes or shareholders do not approve of the conversion terms at the AGM and proceeds from the retail component of the Entitlement Offer is not sufficient.
Under the Entitlement Offer, eligible shareholders are invited to subscribe for one (1) new fully paid ordinary share in MedAdvisor (New Share) for every two and a half (2.5) existing MedAdvisor shares held on November 10.
The company plans to add a complementary digital technology suite to Adheris that will allow it to offer integrated adherence and opt-out patient programs powered by advanced data and analytics.
Adheris President John Ciccio will run the combined US business if the deal proceeds.
The company also announced that Steve Watt, MedAdvisor’s Chief Revenue Officer, had resigned.