Just 13 years after setting up in Dublin on the strength of £50,000 in start-up capital by IT systems entrepreneur Mr Brian Ennis, Irish Medical Systems (IMS) is being acquired for up to £11 million sterling (€17 million) by Voyager 2000, a young IT finance concern listed on the Alternative Investment Market (AIM) in London.
The company has developed a suite of software applications, known as Maxims, for the clinical healthcare market in Ireland and Britain that addresses the acute and community aspects of patient care at hospitals.
Acquisition terms involve an initial £4 million in shares plus a £7 million deferred consideration in shares if IMS delivers aggregate three-year pre-tax profits of £3.5 million.
The last annual figures showed pre-tax profits of £300,000 on turnover of £4.29 million (€5.45 million).
At the same time, Voyager 2000 is raising £2.5 million development capital to expand IMS by way of a placing and open offer of new shares at 10p each.
The company intends to return to the AIM this morning after temporary suspension with its name changed to IMS Maxims.
Mr Ennis, who will be chairman and chief executive of the new board, explained that the deal with Voyager 2000 was prompted by the need for expansion funds for the Irish concern.
"We started looking for development capital without floating on the market," he said. "The reverse take-over by Voyager satisfies our development capital requirement and the public listing provides us with the opportunity to make acquisitions for shares."
Of the initial £4 million consideration, Mr Ennis is getting new shares worth just more than £2 million and stands to receive deferred consideration of nearly £4 million in 2002 if profit targets are met. Other key IMS shareholders include Mr Viktor Kozeny, a controversial Czech millionaire who was granted Irish citizenship in 1995.
At that time he invested £1 million in the business in exchange for a 20 per cent stake.
Also in 1995, Mr Terry Fossy and Ms Orla Jenkinson, respectively technical director and operations director, each acquired 10 per cent equity stakes.
Overall, around £10 million has been invested in the business since 1986, with £5 million coming from the European Commission, £1 million obtained last year from a BES issue and about £2 million from internal cash generation. Last year, the company paid £930,000 to buy CL Software, an Irish healthcare software company and, in the same year, opened an office in Britain. Currently, IMS employs 80 people, half in Ireland and half in Britain.
Mr Ennis (56) started the business in 1986 after 21 years as a systems manager with Aer Lingus and four years with Memory Computer as joint managing director.
He is a Fellow of the Chartered Institute of Management Accountants and of the Irish Computer Society.
The potential market for the Maxims product is substantial, with surveys indicating annual expenditure by British hospitals of up to £1.4 billion sterling a year on IT clinical and administrative systems.
