MedAdvisor Eyes $42M Sale of ANZ Business with Big Software Player
MedAdvisor Limited has entered a non-binding agreement to sell its ANZ business division for a headline price of $35 million plus a potential earn-out, marking a significant strategic shift.
- Non-binding Letter of Intent signed with a subsidiary of a multinational software giant
- Headline sale price of $35 million plus an uncapped three-year earn-out estimated at $7.35 million
- Transaction subject to due diligence, regulatory approvals, and binding documentation
- Exclusivity granted for due diligence with a $1 million break fee under certain conditions
- Proceeds likely to reduce debt and potentially return capital to shareholders; US business excluded
Strategic Move to Divest ANZ Operations
MedAdvisor Limited, a leader in pharmacy-driven patient engagement solutions, has announced a significant development in its corporate strategy. The company has entered into a non-binding Letter of Intent (LOI) with an Australian subsidiary of a major multinational software company to potentially sell its ANZ business division and related intellectual property. This move could reshape MedAdvisor’s operational focus and financial structure.
Deal Structure and Financial Terms
The headline price for the transaction is set at $35 million in cash, with an additional uncapped earn-out component based on the Target Group’s performance over the next three years. This earn-out is currently estimated to be around $7.35 million, potentially bringing the total consideration to approximately $42.35 million. Notably, $8 million of the headline price will be held back initially and subject to post-completion adjustments, including working capital assessments.
Conditions and Exclusivity
The LOI grants the purchaser exclusive rights to conduct due diligence and negotiate binding sale documentation over an initial five-week period, extendable by two weeks. MedAdvisor has also agreed to a $1 million break fee payable under specific circumstances, such as termination by either party or the emergence of a superior competing proposal. These provisions underscore the seriousness of the negotiations while preserving flexibility for MedAdvisor’s board.
Use of Proceeds and Strategic Implications
While the company has yet to finalize plans for the proceeds, it signals a likely focus on debt reduction and a potential return of capital to shareholders. Importantly, the sale excludes MedAdvisor’s US operations, which remain a core part of its global footprint. This divestment could allow MedAdvisor to streamline its business and sharpen its focus on growth markets outside ANZ.
Outlook and Next Steps
The transaction remains subject to due diligence, regulatory approvals, and the execution of binding agreements, with a target to finalize before the end of June 2025. Investors will be watching closely for updates on these fronts, as well as any competing bids that might emerge. The outcome will have material implications for MedAdvisor’s strategic direction and shareholder value.
Bottom Line?
MedAdvisor’s potential ANZ divestment sets the stage for a leaner, more focused future—but key details remain to be settled.
Questions in the middle?
- Who exactly is the multinational software purchaser behind the subsidiary?
- How will the earn-out structure impact MedAdvisor’s financials if performance targets are exceeded or missed?
- What are the detailed plans for deploying sale proceeds, especially regarding shareholder returns?
