Health software is still a buy for companies in the know. Two ASX businesses today said that they remained keen on their respective buyout and takeover deals.

Corum Group (ASX:COO), a company that specialises in pharmacy software, is buying out a fellow investor in an electronic gateway called Pharm X that links pharmacies, pharmaceutical wholesalers and direct suppliers to the pharmacy market.

Corum will pay about $770,000 for this investment, which is expected to be cashflow accretive in the first year.

It is not taking advantage of a coronavirus plunge in value, but a complicated lawsuit that has gone its way.

PharmX is co-owned by Corum and three other investors, one of which is a company called Fred IT Group. It claims to be Australia’s largest pharmacy IT company.

But in 2013 control over the Melbourne company changed, a fact that should have been communicated to its fellow investors in PharmX but wasn’t.

Corum said last year it had been reluctantly pulled into a lawsuit that started partly because of the change of control, and partly because PharmX hadn’t been paying some of the distributions owed to investors.

In December 2019, the Supreme Court of Victoria found that Fred IT had in fact undergone a change of control in 2013. It ordered the investors to enter mediation, which failed, and Corum is now exercising its rights under the investor agreement to buy out Fred IT’s investment in PharmX.

 

The other deal still on the table is Citadel Group’s (ASX:CGL) takeover of Wellbeing, a UK healthcare software company.

The investor says it’s on track to complete the deal by April 3. Wellbeing manages patient workflow data and uses AI to detect high risk patients through its data management system.

Citadel says it’s currently meeting earnings expectations and around 70 per cent of revenues are recurring revenues.

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