This morning, radiology imaging software and storage company Pro Medicus announced a 10 year deal worth $140m with Baylor Scott & White Health, a health network based in Dallas, Texas, with over 50 hospitals. As a result of this announcement, Pro Medicus shares reached a new all time high. Notably, the contract is for the full suite of Pro Medicus products, being the viewer, the archive, and the worklist. According to the Pro Medicus CEO Sam Hupert, that means nearly 500 additional radiologists will be exposed to the benefits of the Visage 7 product.
Why The Baylor Scott & White Health Deal Is So Important For Pro Medicus
The Pro Medicus deal with Baylor Scott & White Health is notable both for its length and the per-year value. For example, the recent deal with Memorial Sloan Kettering for the full stack was a minimum of $24m AUD for 7 years. That’s about $3.4m per year.
In comparison, the deal with Baylor, Scott & White is easily a record deal for Pro Medicus. It is worth a minimum of $140m over 10 years, which works out to be about $14m per year. That’s a huge increase.
Even after this record deal (which will obviously leave the sales pipeline) the company says that “Our pipeline remains strong and spans all market segments.”
I remain a happy holder of Pro Medicus shares with zero intention of selling any more Pro Medicus shares around current prices. Indeed, I will certainly be increasing my desired buy price after this excellent news. To find out my full list of holdings, join the waitlist to become a supporter, via this link.
Disclosure: The author of this article Claude Walker owns shares in PME. He will not trade PME shares for at least 2 days following the publication of this article. This article is not intended to form the basis of an investment decision and is not a recommendation. Any statements that are advice under the law are general advice only. The author has not considered your investment objectives or personal situation. Any advice is authorised by Claude Walker (AR 1297632), Authorised Representative of Equity Story Pty Ltd (ABN 94 127 714 998) (AFSL 343937).
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