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Medical software group MedAdvisor (ASX: MDR) is prepared to massively dilute current shareholdings to secure the funds for a $49 million acquisition of Adheris LLC.
The Melbourne-based company has entered into a binding agreement to acquire the business from Syneos Health for US$34.5 million, in a move that would make it a leader in tailored opt-out, direct-to-patient medication adherence programs in the US.
Within months of receiving the green light to roll out its technology for eScripts in Australia, an emboldened MedAdvisor is embarking on a capital raise at a 12.5 percent premium - not a discount - to raise $45 million.
That figure is just the target of the offer, which is not underwritten and could feasibly mean the issuance of 161.11 million new shares, implying a value of $72.5 million at the offer price of $0.45 per share.
To put this planned dilution in context, MDR's market capitalisation at its current share price is just shy of $100 million.
The board of MedAdvisor is clearly sold on the benefits of Adheris' technology and the potential for its own IP to make headway in North America, highlighting an addressable network of more than 180 million and 25,000 pharmacies in the US that represent 57 per cent of the country's prescriptions.
This deal would save MedAdvisor a great deal of effort integrating with US pharmacies and electronic health records given Adheris already has networks in place.
The two companies have already been integrating live or nightly data feeds with 27 chains since establishing a strategic partnership in 2019.
"Medication non-adherence is a multi-billion-dollar global market with a lack of global players working to solve it," says MedAdvisor CEO and managing director Robert Read.
"The US represents about 40 per cent of the world's medicines market and Adheris has the potential to reach 1 in 2 Americans through its opt out patient programs."
He describes the acquisition of a strategically aligned partner like Adheris will be transformational for MedAdvisor, and this is both in terms of scale and revenues.
"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," he says.
Adheris' current president John Ciccio set to run the US business under the agreement, including MedAdvisor's US subsidiary.
Meanwhile, MedAdvisor's chief revenue officer Steve Watt has resigned.
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