ASX Health Stocks: The secret is out – Chemist Warehouse plans ASX listing via Sigma healthcare merger

Chemist Warehouse plans to list on the ASX via a merger with Sigma Healthcare
4D Medical to acquire US-based leader in lung and heart AI-driven technology Imbio
Rhinomed shares plunge 37% after announcing plans to delist from ASX early next year

Sigma confirms merger with Chemist Warehouse

Pharmaceutical distributor and Amcal owner Sigma Healthcare (ASX:SIG) has confirmed one of the market’s worst kept secrets – it’s planning on merging with Chemist Warehouse and will undertake a $400 million entitlement offer.

SIG has announced it has entered into a merger implementation agreement (MIA) to merge with CW Group Holdings Limited (CWG or Chemist Warehouse Group).

The company will acquire Chemist Warehouse through a cash-and-scrip deal with CWG shareholders receiving $700 million in cash combined with SIG shares, leading to their ownership of 85.75% of the merged entity (MergeCo), pending various approvals, including that from the competition regulator ACCC.

SIG shareholders will hold the remaining 14.25% in the reverse listing deal. A new $1 billion debt facility with NAB and ANZ has been established for SIG to fund the cash consideration required under the proposed merger.

The indicative MergeCo market capitalisation will be more than $8.8 billion and is expected to sit well within the S&P ASX200 following quarterly re-balancing.

Meanwhile, SIG is undertaking a $400 million raise via an entitlement offer to provide increased working capital required to implement the Chemist Warehouse supply contract it signed in August and starting in July 2024, along with progressing business growth initiatives.

“The Proposed Merger is a step-change event for Sigma,” chairman Michael Sammells said in a market announcement.

“With Sigma having had a commercial relationship with CWG and its founders spanning more than 40 years, we are excited by the efficiencies, synergies and growth opportunities that we anticipate being unlocked through the merger of the two complementary businesses.”

CWG chairman Jack Gance says the combination of CWG’s retailing and marketing capabilities and Sigma’s state-of-the-art distribution infrastructure and logistics capabilities presents a unique opportunity for both CWG and Sigma shareholders.

“We look forward to building the next chapter of CWG’s success for the benefit of our customers, staff, franchisees and shareholders,” Gance says.

4D Medical to buy US medtech Imbio

Respiratory imaging technology company 4D Medical (ASX:4DX) has signed a binding agreement to acquire US-based medical tech company Imbio.

4DX says Imbio will be acquired for an upfront purchase price of US$25 million ($38.5 million), plus a contingent earnout including one tranche of up to US$10 million in CY2024 and two tranches of up to US$5 million each in CY2025, all conditional on the achievement of key milestones.

The company has successfully completed a capital raising of $35 million by way of a placement to partly fund the acquisition.

4DX says Imbio is a recognised leader in lung and heart artificial intelligence (AI)-driven technology, with a focus on providing structural analysis that delivers visual qualitative and quantitative assessment of lung and heart anatomy.

The company says the acquisition expands 4DX’s product offering to clinicians by incorporating Imbio’s highly complementary suite of diagnostic products, including its four FDA-cleared products.

Imbio is forecast to deliver US$3 million in revenue in CY2023, US$6.3 million in CY2024, and to be cashflow positive in the first 12 months post integration.

Subject to receiving shareholder approval, participants in the placement will receive one free-attaching option for every two shares issued under the placement.

Rhinomed plans to delist from ASX

Nasal and airway technology company Rhinomed (ASX:RNO) has seen its share price plunge more than 37% today after announced its desire to leave the ASX.

The company has plans for a non-underwritten share purchase plan (SPP) and buyback to assist shareholders who want to bail out before delisting, and to allow those who want to stay on as shareholders the chance to top up.

RNO has also announced a minimum holding share buyback of ordinary share for shareholders who hold less than a marketable parcel (less than $500) of shares at price of 4 cents/share, which is the volume weighted average price of RNO shares for the five trading days ending on the record date of December 8. The shares will be cancelled.

The company’s SPP enables eligible shareholders the opportunity to apply for up to $30,000 worth of new fully-paid ordinary shares, without incurring brokerage, commissions or other transaction costs.

RNO says the board of directors consider the delisting to be in the best interests of the company and its shareholders for a several reasons including limited trading and liquidity, raising capital is highly dilutive, costs involved in being a listed company and management time and effort.

The company says it has applied to the ASX to be officially removed from the local bourse. RNO says the application follows obtaining in-principle advice from the ASX that it is likely to agree to removal of the company from the official list, subject to the satisfaction of certain conditions, including obtaining shareholder approval for the delisting.

RNO plans to go off-market in mid-February, 2024.

Alcidion extends contract with UK provider

Alcidion (ASX:ALC) has announced it has signed a contract extension with South Tees Hospital NHS Foundation Trust for use of its Miya Precision EPR platform and Better OPENeP electronic prescribing and medicines administration (ePMA).

ALC first signed a contract with South Tees in November 2020 and first extension in December 2020. South Tees is the largest hospital trust in Tees Valley in the UK, with more than 1,000 beds, employing ~9,000 clinical and operational staff and providing care for more than 1.5 million people.

South Tees have extended the contract for an additional eight years with the total contract now 10 years to 2033 as two years remained on the original contract.

The minimum contract value for the total 10-year contract period is $23.3 million with $2.7 million pertaining to the final two years of the existing contract.

The initial contract value covers the use of Miya Precision and medications management from Better, ALC’s strategic partner.

The company says further options are in the contract to include PAS (Silverlink PCS), emergency department and virtual care modules which if taken would add an additional $9.3 million to the contract value. Furthermore, the contract includes the ability to extend up to 15 years.

ALC says total potential contract value if all additional module options and extension to 15 years is taken up would be $54 million.