Pender Growth lifts Pender Software interest to 94.6%

Executive Summary

• Pender Software Holdings Ltd. (PSH), a subsidiary of Pender Growth Fund Inc. (PTF), has completed the acquisition of BroadCare Solutions Ltd., a UK-based provider of patient management software and financial assurance services.
• Concurrent with the acquisition, PTF increased its equity stake in PSH from approximately 87.7% to 94.6% by injecting cash and converting an outstanding promissory note into equity, bringing the total cost base of PTF's investment in PSH to approximately $20 million.
• Following the acquisition, PSH expects pro forma revenue to exceed $20 million, up from approximately $13 million in the prior year, while maintaining EBITDA margins greater than 30%.

Key Details

• Acquisition Target: BroadCare Solutions Ltd., which operates patient management software products (BroadCare, CareTrack) and financial assurance managed services.
• Target Operations: BroadCare serves approximately 75% of integrated care boards in the UK and has been trusted by the National Health Service for over 15 years. It will continue to operate under existing management led by Managing Director Umer Shariff.
• Financing Structure: PTF made an additional investment in PSH by injecting cash and converting its outstanding promissory note from PSH into PSH equity.
• Equity Stake Change: PTF’s holding in PSH increased from ~87.7% to ~94.6% of outstanding equity.
• Investment Value: The cost base of Pender Growth's total investment in PSH is now approximately $20 million.
• Financial Impact:
  • PSH generated approximately $13 million in revenue last year with EBITDA margins >30%.
  • Post-acquisition, PSH expects pro forma revenue in excess of $20 million while maintaining similar EBITDA margins.
• Strategic Context: This is PSH's third acquisition. Pender Growth cites the acquisition as adding a "well-established, mission-critical software platform with deep customer relationships and a strong recurring revenue profile."

Notable Quotes

• "Pender Growth's increased equity stake reflects the company's continued conviction in PSH's business model and in the quality of its expanding portfolio of software companies."
• "The BroadCare acquisition adds a well-established, mission-critical software platform with deep customer relationships and a strong recurring revenue profile, characteristics Pender Growth looks for in PSH's investments."