Hills Limited has revealed plans to spin out its Hills Health Solutions (HHS) business to merge with health technology provider Lincor Solutions.
The newly formed company will be renamed to Lincor Limited with plans to list on the Australian Securities Exchange before the end of the year.
Lincor Limited will be led by current Lincor Solutions chief executive Chris Cashwell. Hills chief financial officer Gareth Turner will take up the same position at Lincor Limited. The new board will include Hills chair Jennifer Hill-Ling, Lincor Solutions chair Gregg Michaelson and three other unnamed independent directors.
Hills' health business supplies and installs health technology solutions and patient entertainment to hospitals and aged care facilities. Hills has been a Lincor Solutions distributor since 2014, delivering its software platform as-a-service. The two companies have won contracts with major facilities such as the Royal Adelaide Hospital, Blacktown Hospital and Sydney Northern Beaches Hospital.
HHS generated $31.3 million in revenue in the 2016 financial year, accounting for 9.5 percent of Hills total revenue of $328.9 million. EBITDA for the business segment was $1.3 million.
"While our expanding healthcare solutions operations have the potential to become a key profit driver within Hills in coming years, the opportunities for the healthcare business and its growth potential are much greater as part of Lincor Limited on a global basis," said Hill-Ling.
Founded in 2003, Lincor Solutions provides an integrated communication platform that combines clinical workflow, patient entertainment, nurse call, access control and critical hospital messaging. Lincor Solutions has headquarters in Australia and the US.
The merger is still subject to a number of conditions including shareholder approval.
Hills hinted at further growth opportunities in its financial year report, saying it would soon enter its "back to growth" phase following several years of tough losses.
The distributor's primary source of revenue is its building technology business segment, which made $294 million in revenue in 2016.