Listed HealthTech swoops for Zesty
Induction Healthcare has conditionally agreed to acquire fellow London HealthTech Zesty.
The deal is subject to shareholder approval and will see Zesty founder James Balmain become joint-CEO of the enlarged business alongside Induction’s Dr Hugo Stephenson.
Both Stephenson and Balmain will speak at BusinessCloud’s virtual HealthTech and COVID-19 conference at 10am on Wednesday 20th May.
The deal is for a consideration of £500,000 plus the issue of new shares equivalent to 41.9 per cent of the existing company and approximately 29.5 per cent of the enlarged share capital.
It is the latest step in Induction’s acquisition strategy following its IPO in May last year.
Zesty is a digital healthcare patient engagement platform which allows patients to manage their hospital outpatient appointments, read their administrative and clinical correspondence, attend a video based consultation and store a personal copy of their clinical record.
For the year ended 31st December 2018, it reported revenue of £1 million and a net loss before tax of £500,000.
Induction made a £2.7m loss in the year to March 31st 2019, and a £2.2m loss in the six months ended 30th September 2019.
Induction has two platforms, Induction and MicroGuide, which support healthcare professionals in multiple markets, including UK, Ireland, Australia and South Africa.
The Induction app claims to be the number one healthcare collaboration app in the UK and helps more than 140,000 users – mostly doctors – to increase productivity and enhance communication by securely sharing phone numbers and bleeps, bookmarks, documents and messages in a clinical setting.
The MicroGuide app, used across approximately 75% of NHS trusts, has 173,000 users. MicroGuide is supporting Barts Health NHS Trust in the Nightingale London project with antimicrobial and COVID-19 content.
In March 2020, Induction saw significant growth in demand for its tools, as a result of the strain that COVID-19 is placing on healthcare institutions. There has been a 66% increase in daily user registrations for the Induction app, with an additional 11,500 clinicians engaged.
Stephenson said: "Zesty has demonstrated that it can improve patient experience while saving hospitals time and money through its market leading patient portal and outpatient bookings engine.
“In the process, Zesty has solved the problem of integrating with different electronic patient record systems.
“Connecting the most used app by NHS doctors (Induction) and the most used app by NHS trusts (MicroGuide) with patients and their health records, has the potential to deliver the right resources to the right places at the right time - a transformational opportunity for healthcare."
In a management reshuffle earlier this year, Stephenson was promoted to the CEO role as founder Ibs Mahmood dropped down to serve as Chief Business Officer.
Mahmood will leave the company’s board as a result of the latest deal, with former NHS Digital CEO Andrew Williams joining Balmain on the board. However he will continue in a business development role, primarily focused on M&A and fundraising for the group.
Balmain said: "I see the frustration that clinical teams and patients feel every day. Basic things, like updating a patient record or booking an appointment - are just not easy enough. So an app for doctors, connected to an app for patients makes total sense.
“Induction and Zesty coming together can help improve the way healthcare is delivered. I am excited by the reach and capability of the new combined Induction Group.
“We will be working as hard as we can to help bring clinical teams and patients together, in an efficient and low-friction way. The COVID-19 pandemic has focused minds within healthcare on the benefits of using digital technology in all sorts of ways - I think we can and should be doing more."