Telstra Health sells software platform for $4m

Alcidion (ASX:ALC) acquires 31 customers for their platform

This acquisition analysis looks at consolidation in Australian hospital software as a result of Telstra Health divesting more.

Alcidion is acquiring its competitor Kyra from Telstra Health for up to $4.0m in cash.

I’ll give a brief background on the companies involved and then go into the terms of the deal itself. After that, we’ll look at how it will improve the buyer's financial performance and how the acquisition fits their strategy (or not).

Company Backgrounds

Alcidion provides software to healthcare providers to help clinicians get better visibility and intelligence into patients. The software gives visualisations to view patient journeys, care status, clinical operations, and more.

Alcidion has customers across Australia, New Zealand and the UK.

Alcidion’s FY26 revenue will exceed $50m and produce $5m of EBITDA.

Kyra is a software platform that gives hospitals a view of patient flow, patient journeys and data across the hospital. Kyra was owned by Telstra Health. Telstra Health developed Kyra off the back of acquiring Health IQ in 2015 and DCA eHealth Solutions in 2013.

Kyra has 33 customers across six Australian states.

Kyra had $3.7m in revenue and $1.1m in EBITDA for FY26, essentially flat compared to the prior year (FY25). Most of this is recurring support and maintenance contracts.

The Deal

The deal is A$4.0m in Total Consideration, implying a 0.81x-1x revenue multiple and 2.7x-4x EBITDA multiple depending on the nature and conditions of the earnout.

The Total Consideration is 75% in cash upfront with a cash earn out making up the rest. Let’s look at each component.

The Upfront Cash is ~$3m.

An Earn Out of up to $1.0m will be paid subject to Kyra meeting certain revenue metrics over the 12 months post completion. This is most likely tied to retention and, possibly, growth.

Strategic & Financial Impact

Financing

The $3.0m for the upfront and $1.0m can be funded from the $15.1m in cash that Alcidion has available. The acquisition represents 26.5% of Alcidion’s available cash.

With the majority of Kyra customers on annual contracts, the cash from $3.7m in customer contracts will replenish the $3m by the end of FY27 if not sooner.

The net impact on revenue is minimal in percentage terms, but it does help bump the revenue growth rate. It makes a bigger impact on EBITDA, likely adding over 15%.

Strategy

In healthcare, particularly patient critical systems, it can take a long time to win customers. Some of Kyra’s customers had been with it for over 10 years. Acquiring Kyra gives Alcidion additional customers.

The mention of “a seamless customer transition process” in the ASX announcement means that Kyra customers will likely be transitioned to Alcidion.

Telstra must have got comfort that the Alcidion product was the same or better, which would mean Telstra can hopefully maintain a good reputation with Kyra’s customers.

This is ultimately a customer acquisition for Alcidion and a dignified divestment of a non-strategic business by Telstra.