Compliance-based information management software supplier Ideagen has moved fast to build the business since its AIM listing in July 2012. It has already added a second acquisition, investing £2.5m (£1.6m in cash) for fellow-UK information management software provider Plumtree Group, who supplies the healthcare sector. The move will take Ideagen into the UK healthcare sector for the first time and extend its existing US healthcare business. It has raised £6m via a share placing to fund this and future acquisitions making its growth intentions crystal clear.
It is a substantial purchase for Ideagen who delivered revenue of £4m for the year to April 2012 (see here). Plumtree generated revenue of £2.44m in its last year, including £0.9m of recurring revenue which Ideagen is actively looking for, EBITDA of £0.45, and had net assets of £0.3m as of its year-end on 31 March 2012. It has 125 NHS customers - Foundation and Primary Care Trusts and strategic partnerships with Abbot Diagnostics and Cruinn Diagnostics. In December 2011 Plumtree won the Framework contract for NHS Scotland for the supply of Electronic Document Management. It appears to be doing well in its market niche and Ideagen/Plumtree should benefit from the NHS local procurement strategy, which is expected to open up the NHS IT market to a wider range of suppliers (see UK Healthcare SITS market trends and forecasts 2012). Ideagen will also benefit from a broadening of its UK business and from cross-sell opportunities, so this looks like a positive move. However, as a small company, it needs to ensure that a fast train of acquisitions does not derail the business