Melbourne-based Telstra Health, the digital health arm of Telstra Corporation, has entered into a binding agreement to purchase MedicalDirector, a general practice clinical and practice management software provider based in Sydney, for an enterprise value of A$350 million ($256 million) – still subject to customary adjustments.

The transaction is targeted to close by next year's first quarter.

WHY IT MATTERS

MedicalDirector provides Australian GPs, specialists and pharmacies with software as a service, including electronic health records; patient and practice management; billing; scheduling; care coordination; medicines information; clinical content and most recently, a cybersecurity solution.

The software company supports approximately 23,000 medical practitioners and helps deliver over 80 million consultations each year, according to Telstra Health's press statement. 

The acquisition will help fortify Telstra Health's existing presence in the UK, where MedicalDirector has been establishing itself in the past years. Moreover, it will help the company realise its vision of a "connected and improved digital health experience for all".

THE LARGER TREND

Telstra Health has started making its move to expand globally via acquisitions. Last month, the company disclosed its deal to buy a majority stake in PowerHealth, another healthcare software provider based in Adelaide. The company specialises in billing, costing and revenue solutions, budgeting, safety and quality, decision support and application integration solutions. 

Telstra Health also wanted to leverage PowerHealth's international business, being present in Canada, Ireland and the Middle East. This transaction is expected to close by the end of 2022's second quarter.

ON THE RECORD

"Telstra Health has transformed substantially over the past five years and this announcement reflects its continuing maturity as a business and its importance as part of Telstra’s long-term growth strategy. It also reflects its continued growth into a global business, including strengthening our existing presence in the UK where MedicalDirector has been establishing itself in recent years," Telstra Health Board Chair Brendon Riley said.

"I am excited about the opportunity to continue to grow MedicalDirector, combining its sophisticated solutions with Telstra Health’s clinical and health system capabilities, including our expert team of medical practitioners (including GPs), health information managers and other health experts," added Telstra Health Managing Director Mary Foley.

"The ability to bring our knowledge, trusted industry-leading products and our team to support the vision of Telstra Health is recognition of the great business we have built. We look forward to working with Telstra Health to help support the critical work of the healthcare industry through innovation and technology, never more so important than right now," MedicalDirector CEO Matthew Bardsley also stated.