ONE: ~$20 million placement and SPP to advance products

Our 2021 Tech Pick of the Year, Oneview Healthcare (ASX: ONE), has just received commitments for approximately AUD$20 million at a price of 18c per share.

We think this is a strong raise and sets ONE up nicely to capture further market share in the US healthcare market, as well as globally.

We also think the size and timing of the raise are appropriate given ONE’s recent breakthrough agreement with the largest hospital bed supplier in the USA - $22BN capped Baxter International Inc. (NYSE: BAX) which we covered in our latest ONE note:

Click here to read our note on ONE’s agreement with Baxter

Bell Potter and MST are appointed as Joint Lead Managers to complete this sizable placement, with a ~$2M Share Purchase Plan (SPP) to follow.

ONE’s business model is to sell hospital bedside tech - connecting the patient in the hospital bed to nurses, meal service, medical images and records, educational content, entertainment and other in room systems to enhance the patient experience and help make the hospital run better.

The value proposition of ONE’s tech was further validated in June this year, when we saw a breakthrough agreement between ONE and Baxter, outlined by a “value added reseller agreement” where ONE’s technology will be sold to certain customers of Baxter.

The fresh placement will enable ONE to meet the demands of the Baxter deal, as well as expanding the company’s Bring Your Own Device (BYOD) technology.

The Baxter deal, along with the placement today, could see ONE bring in a potential 3,000 to 5,000 new beds deal as outlined in the Baxter announcement:

ONE also put out a business update presentation yesterday, where they hinted at a 40-50% upside in revenue. The revenue guidance for FY23 was approximately AUD $20.4m - 23.7m, which is a significant upside in material deals for ONE’s technology.

What’s next for ONE:

🔄 4x new hospital network deals

Now that ONE’s cash position is strengthened, we want to see the company sign a deal for 3,000 beds, which have been in advanced negotiations. This is in addition to the deal with Baxter that could bring in another 3-5k beds.

There is also a huge pipeline of contracts and deals to come for ONE, which could see the recurring revenue of ONE touch ~$18m annually:

Today’s capital raising will assist ONE in strengthening outreach to potential customers, and will hopefully be able to close one of these deals. Some $2M of the raise will be assigned to global sales and marketing.

🔄 Update on bring your own device (“BYOD”) solution

In ONE’s latest presentation , the company noted that there is a $1BN Total Addressable Market (TAM) for BYOD in the US, Canada, Australia, UK and Germany.

BYOD would move ONE further towards the Software as a Service (SaaS) model that has been the foundation of some many major tech success stories.