Tecsys Inc., a Montreal-based supply chain management software company, said today it plans to acquire Logi-D Holding, a Laval, Quebec-based provider of point-of use technology to automate supply chains for hospitals and healthcare organizations, for 3.05 million Canadian dollars (approximately U.S. $2.81 million), virtually all of it in cash.
Under the proposed deal, which is expected to close May 31, Tecsys will pay CA$2.95 million in cash for Logi-D and finance the balance with CA$100,000 in Tecsys stock. The proposed transaction would increase Tecsys' exposure in the health care vertical, where it currently generates more than 30 percent of its revenue.
Peter Brereton, Tecsys' president and CEO, said in a statement that the two companies had complementary product lines that should enable the combined company to extend the benefits of supply chain technology to hospitals, clinics, and other health care organizations.
The health care industry, and the hospital sector in particular, are one of the last sectors to adopt technologies that automate supply chain processes. With North American hospitals under increasing pressure to reduce costs and improve processes, they are considered "low-hanging fruit" for information technology firms with both supply chain and hospital management know-how.
Logi-D's technology reduces the time that clinical staffs spend managing inventory, which helps reduce costs and improve patient care, Brereton said in the statement.
Tecsys' market is almost exclusively based in the United States. According to the American Hospital Association (AHA), there are more than 5,700 hospitals in the country, with an additional 550 health systems composed of hospitals, nursing homes, clinics, home health agencies, and school health centers.