Financial software group Trintech has agreed to buy Chicago-based Concuity for as much as $9 million, thus expanding the Irish group's reach in the US healthcare market.
Trintech will pay an initial sum of $5.5 million, followed by a further payment of no more than $3.5 million depending on performance. Concuity is a private company specialising in software applications that enable hospitals and clinics to recover unpaid patient and health insurance revenues. It has 18 clients.
Cyril McGuire, Trintech's chairman and chief executive, welcomed the acquisition, saying it demonstrates the group's commitment to enter new markets.
In a statement to the stock exchange, Trintech said that in addition to the $8.25 million being paid to acquire Concuity, it expects to fund operational losses of as much as $1.5 million from the acquisition date through to the end of January 2008. At this point it expects the new addition to be earnings accretive.
Trintech said it expects the acquired business to generate revenues of about $800,000 for the remaining two months of its own fourth quarter and incur an operational loss about $400,000. For the next financial year starting in February, Concuity is expected to generate revenue of between $5.5 million and $6 million and incur a net operating loss of about $1.1 million.
