The acquisition is in line with the Group’s strategy of identifying sustainable long-term market opportunities delivering connected healthcare systems.
Founded in July 2017, Dovetail Lab creates software that gives patients full control of their healthcare records, delivering secure exchange of data between different health services and new digital technologies involved in patient care. Its patent-pending blockchain-based technology delivers accountability, security and trust in the transmission of healthcare data, whilst mitigating risk and maximising health outcomes for patients. Blockchain is a key element of our updated technology Roadmap which we will discuss further at our Capital Markets Day on 29 November 2018.
Dovetail Lab expects to generate revenue of approximately £0.9m and a small operating loss during its first full year of operation in 2018. The team based in London will join EMIS Group as part of the acquisition, including Dovetail Lab’s CEO and co-founder Alexandra Eavis. Existing Dovetail Lab shareholders (comprising management and early stage investors) will retain a 10% share of the original business subject to a call option in favour of EMIS Group exercisable between 2023 and 2025.
EMIS Group is acquiring an initial 90% shareholding in Dovetail Lab on a cash and debt free basis for £2.5m, to be satisfied by £1.5m in cash payable immediately and £1.0m in EMIS Group shares to be issued on successful product delivery milestones. Up to £2.5m of further consideration may be payable on the attainment of certain business plan targets in 2019, 2020 and 2021.
Andy Thorburn, CEO of EMIS Group, said: "This is a very exciting acquisition for the Group, with Dovetail Lab widely regarded as one of the leading healthcare blockchain businesses in the UK, that is driving innovation across the sector.
"The business has already launched a successful pilot of its software within the NHS, giving patients access, visibility and control over their health data using explicit and informed consent to drive data sharing across all health and care settings. The potential applications for blockchain technology in the UK healthcare sector are significant and we look forward to working with the new team to explore these."