Technology and healthcare have always gone together. Which is why as the importance of public health safety increases in tandem with population density, the ‘health tech’ industry is also booming. This is a rapidly growing $6 billion market that has entered its mergers and acquisitions consolidation cycle. And right now, HealthSpace Data Systems Ltd. (CSE:HS) (OTC:HDSLF) (FRA: 38H) is one of the few independent health tech providers left in the entire industry.
Foodborne illnesses are a major threat to public health. In 2017, the CDC launched eight multistate foodborne outbreak investigations, with salmonella and e.coli being the most common. Public health safety is and will continue to be one of the most critical challenges facing our society.
Technology is stepping up to meet this challenge. One important but little known aspect of healthcare technology is healthcare cloud computing. HealthSpace’s (CSE:HS) (OTC:HDSLF) (FRA: 38H) flagship software allows organizations to manage apps, permits, licenses, and other business and compliance data through the cloud. This is not only highly customizable, but also very convenient through a single web-based browser interface. Combine this with its sophisticated analytics and monitoring platform, and organizations can turn mere data into useful and actionable insights.
Its mobile product, HealthSpace Touch, allows companies to conduct paperless field inspections. This can even be done while offline, the data is automatically and securely synced after. It’s an ‘all-in-one’ solution for inspection reporting, with applications far beyond just the healthcare field.
Health tech is a huge industry. Frost & Sullivan expects it to almost touch $10 billion by 2021. Transparency Markets International forecasts the industry to be worth $6.8 billion by the end of 2018, with North America accounting for the 72% of the entire market.
‘Whales’ Are Swallowing the Independents
The health tech industry is now entering its consolidation cycle. Independent health tech providers are being snapped up left and right and HealthSpace Data Systems Ltd. (CSE:HS) (OTC:HDSLF) (FRA: 38H) could potentially be the next acquisition target.
In August 2017, Tyler Technologies, Inc. (NYSE:TYL) acquired health tech company Digital Health Department (“DHD”), a SaaS company focused on environmental health software.. HealthSpace CTO, Silas Garrison, was formerly a senior developer at DHD, and was very instrumental in the development of its initial software.
In 2017 alone, there were over 40 mergers and acquisitions in this space. Here are a couple more prominent examples:
- NASDAQ-listed HMS Holdings Corp. acquired health engagement platform provider Eliza Corporation for a cash purchase price of $170 million.
- Welltok Inc., a health enterprise software company acquires analytics company Tea Leaves Health for $83 million.
With such a frenzy of mergers and acquisitions in this industry, it may only be a matter of time before HealthSpace Data Systems Ltd. (CSE:HS)(OTC:HDSLF)(FRA: 38H) gets acquired. The company is a prime acquisition target, and here’s why.
The HealthSpace Advantage – Top Notch Clients Plus Constant Innovation
HealthSpace (CSE:HS) (OTC:HDSLF) (FRA: 38H) may be small, but its clients are giants. Its public sector clientele includes:
- Health Canada
- Tennessee Department of Agriculture
- Tennessee Department of Health
- Ohio Department of Health
- Fraser Health Authority
- Washington State Department of Health
- Milwaukie Health Department
- 34 Local Health Departments in Oregon
- Wisconsin Department of Health Services
- West Virginia Bureau of Public Health
In total, the company runs 10 statewide programs that touch 23 different states. This is an extraordinary achievement for a company of this size.
But governmental entities aren’t its only clients; the company also offers its SaaS solutions to the hospitality and agriculture industries. In the hospitality industry alone, the company has touched over 200,000 restaurants on the continent and over 14,000 hotels.
HealthSpace Data Systems Ltd. (CSE:HS) (OTC:HDSLF) (FRA: 38H) currently does about $2 million in annual recurring revenue. Over the past three to five years, it has amassed contracts totaling about $10 million.
The clientele that HealthSpace has amassed over the years could potentially make this a steal trading at a $15 million market cap.
Cutting Edge Blockchain Venture Backed by Leading Partnerships
HealthSpace (CSE:HS) (OTC:HDSLF) (FRA: 38H) has a far-sighted management team that recognizes the power and potential of blockchain technology. The company is releasing a blockchain network for decentralizing quality control and safety audits; a ‘blue ocean’ space that has yet to be exploited. The alpha prototype will be released in the first quarter of 2018, and it will test the product with its various industry partners.
Supporting HealthSpace’s (CSE:HS) (OTC:HDSLF) (FRA: 38H) ambitions to integrate blockchain technology into its product offerings are strong partnerships. In December 2017, HealthSpace signed a Letter of Intent with SIMBA Chain Inc., a Blockchain-as-a-Service company. SIMBA Chain is a wholly-owned subsidiary of ITAMCO, and was formed from a DARPA grant to develop a secure and unhackable messaging platform for the US military.
It is currently partnered with the Center for Research Computing at the University of Notre Dame to develop its API. Recently, SIMBA Chain was awarded a contract by a Fortune 500 American multinational chemical company to integrate its API with the company’s ERP systems to use blockchain technology in tracking and logistics.
HealthSpace (CSE:HS) (OTC:HDSLF) (FRA: 38H) has also signed a Memorandum of Understanding with Vanbex Capital, a venture capital firm focusing on blockchain technology. Vanbex Capital has over 60 high growth blockchain companies in its portfolio, including Etherparty, a company focused on providing an easy-to-use smart contract creation tool. HealthSpace will be collaborating with Etherparty to develop its blockchain product, while Vanbex Capital has injected $1 million into HealthSpace via private placement.
Poised for Growth: Positioning Itself for the Recreational Marijuana Boom
In summer 2018, recreational marijuana will be legalized throughout Canada. Deloitte has estimated that this market has a base retail value of $4.9 billion to $8.7 billion annually, with a total economic impact of over $22.6 billion. In America, legal cannabis sales hit $10 billion in 2017 and are expected to hit $24.5 billion by 2021.
HealthSpace has been more than prepared. In August 2017, it signed an MOU with 1804 Management LLC to expand its HealthSpace CS Pro technology to cannabis producers and distributors. HealthSpace will refine its applications for use in the ‘Just-In-Time’ inventories and lean manufacturing processes that power successful cannabis producers.
Combine both blockchain and recreational cannabis with the SaaS model, and you have a company that can not only easily scale, but has already identified new opportunities for growth.
HealthSpace’s Market Cap Is Still Small but It Has Already Shown Impressive Returns
With such a frenzy of mergers and acquisitions in the health tech industry, it’s no surprise that companies have been doing very well. But even in such a booming market, HealthSpace Data Systems Ltd. (CSE:HS) (OTC:HDSLF) (FRA: 38H) stands out. Its stock has doubled in price over the past year, and the best part is that it’s still small and underpriced with a market cap of approximately CAD $17 million.
Tyler Technologies, Inc. (NYSE: TYL)
Market Cap: $7.25 billion
This Texas-based company has seen its stock price on a consistent uptrend over the years. In the past year, its stock has returned an impressive 23%.
Cerner Corporation (NASDAQ: CERN)
Market Cap: $20.38 billion
Based in Kansas, Cerner Corporation is a supplier of health information technology solutions, services, devices, and hardware. Over the past year, its stock returned 16.5% to investors.
Athenahealth, Inc. (NASDAQ: ATHN)
Market Cap: $5.25 billion
Also based in America, Athenahealth provides cloud-based services, including billing and management, to the healthcare industry. Its stock returned about 15% to investors over the past year.
HealthSpace Data Systems Ltd. (CSE:HS) (OTC:HDSLF) (FRA: 38H)
Market Cap: CAD $17 million
Based in Canada and focused on providing leading edge SaaS solutions to healthcare and other industries. While still small, its stock price has delivered 100% returns to investors over the past year.
5 Reasons Investors Should Consider Adding Shares of HealthSpace to Their Portfolio
HealthSpace Is a Prime Acquisition Target – The health tech industry is consolidating, and smaller players with great value propositions are quickly getting snapped up. With HealthSpace’s (CSE:HS) (OTC:HDSLF) (FRA: 38H)
government contracts, and new technology ventures, coupled with its still small size, could potentially be a prime acquisition target.
Low Market Capitalization – With a market cap of approximately $17 million CAD, HealthSpace is not a large corporation by any measure. With a current stock price of $0.13, HealthSpace is priced at an entry point where investors can potentially earn triple digit profits.
HealthSpace is Constantly Innovating – With an experienced and far-sighted management team and a CTO that developed a product that was acquired by a $7.73 billion dollar giant, HealthSpace (CSE:HS) (OTC:HDSLF) (FRA: 38H) is constantly innovating its product offerings as seen by its foray into blockchain technology and the cannabis industry.
HealthSpace’s Fantastic Client Base – The great thing about SaaS companies is how easy it is to scale their products. HealthSpace, with its stable client base is no different. 100% of their clients have renewed their contracts and it doesn’t look like HealthSpace (CSE:HS) (OTC:HDSLF) (FRA: 38H) will lose a client in the future.
Health Tech Is Only Going to Become More Popular – The health tech industry is projected to grow at almost 20% a year. The amount of healthcare data that needs to be managed will only increase. This is an industry that has huge room for growth, particularly in international markets.