Xped to Acquire JCT Healthcare for $2 Million
JCT Healthcare provides communication solutions to hospitals, aged care, independent living and disability care centres.
Xped Limited (ASX:XPE) announced to the ASX that it has entered into an agreement to acquire all of the issued share capital of JCT Healthcare Pty Ltd for a total consideration of $2 million in cash and 25 million shares to the vendors.
Xped developed a patent protected technology that allows consumers to connect, monitor and control devices via its Internet of Things technology platform, known as the ARDC. The company listed on the ASX via a reverse takeover of Raya Group Limited on 5 April 2016.
About JCT Healthcare
JCT Healthcare provides communication solutions to hospitals, aged care, independent living and disability care centres. The company owns and operates a range of ‘nurse call’ products, such as the Wireless1000, Digi3000 and PoE4000. These products assist in daily communications between patients and staff in order to increase overall efficiency, reduce the response time taken and improve staff and patient satisfaction.
Management Expects the Acquisition to be Earnings Accretive
As per the terms of the Heads of Agreement signed, Xped has agreed to acquire 100% of the issued capital of JCT.
Xped will pay a total of $2 million in cash, with $1 million due on completion of the transaction and the remaining $1 million after 3 months. The company will also offer a $500,000 draw-down facility to fund working capital, subject to Xped’s discretion.
Xped will also pay 25 million shares to the JCT vendors and issue an additional 37,500,000 performance based shares, subject to JCT’s performance.
Management anticipates this acquisition to be earnings accretive as Xped aims to integrate its technology with JCT’s product mix.
Completion of this acquisition is subject to a number of conditions such as both parties being satisfied with the results of the due diligence conducted, receiving necessary approvals and confirmations from the ASX and ASIC and obtaining shareholder approval.
As at 10:30am (AEST), XPE has risen more than 2% and was last traded at 44 cents.
Author: Kaivalya Kandarpa
Apr 19, 2016
Kaivalya is an equity analyst and a client advisor at Wise-owl. She specialises in fundamental and technical analysis for large and mid-cap companies. Having completed her bachelor's degree in Business Administration majoring in Finance, Kaivalya has a comprehensive understanding of international stock market movements. She tracks local and overseas markets and compiles analytical reports for various industries.