Careteq (ASX: CTQ) Acquires Remaining Stake in EHS, Paving the Way for Profitable Growth

Key Highlights:

- Careteq acquires the remaining 45% of Embedded Health Solutions (EHS) for $2.4 million.

- The acquisition is expected to drive profitability and enhance Careteq’s core focus on medication management.

- The company aims to leverage synergies between EHS and HMR Referrals to expand service offerings and boost revenue.

Careteq Limited (ASX: CTQ) has taken a decisive step towards solidifying its position in the healthtech sector with the acquisition of the remaining 45% of Embedded Health Solutions Pty Ltd (EHS) for $2.4 million. This strategic move allows Careteq to fully integrate EHS into its operations, focusing exclusively on medication management and clinical governance in the health, aged, and home care sectors.

The acquisition, structured as a vendor-financed transaction, spreads the payment over eight quarterly installments. EHS’s FY24 underlying EBITDA stands at $1.5 million, providing a solid financial foundation for Careteq as it transitions to profitability at the group level following the divestment of its Sofihub business.

By owning 100% of EHS, Careteq is poised to unlock significant synergies, particularly in driving Residential Medication Management Reviews (RMMR). EHS, a market leader in medication management, will combine its strengths with HMR Referrals’ platform, offering comprehensive solutions that enhance patient outcomes. The integration is expected to deliver operational efficiencies, streamline processes, and create new cross-selling opportunities that will drive revenue growth.

Mark Simari, Executive Chairman of Careteq, highlighted the strategic importance of this acquisition, stating, “This acquisition is a key step in our strategy to focus on our core strengths in medication management. By fully integrating EHS, we are positioned to achieve profitability and deliver sustained value to our shareholders.”

The acquisition is also structured with a 12% annual interest on the vendor-financed amount, secured by a Personal Property Securities Register (PPSR) registration. The completion date for the acquisition is set for August 31, 2024.

About Careteq Limited (ASX: CTQ):

Careteq Limited is an Australian healthtech company specializing in innovative medication management solutions. The company is dedicated to enhancing healthcare outcomes through its subsidiaries, Embedded Health Solutions (EHS) and HMR Referrals. With a focus on residential and home medication management services, Careteq leverages proprietary technology to improve patient care in the health and aged care sectors.

Share Price Update:

Back of today’s ASX announcement $CTQ’s share surged 41.67% to reach A $0.017 at 2:19 PM AEST, 19th August 24.