CareTech Holdings PLC, a pioneering provider of specialist social care services for adults and children in the UK, has acquired a majority shareholding in Malvern-based Smartbox Assistive Technology Limited.
Smartbox is a market-leading creator of software and hardware that helps disabled people without speech to have a voice and live more independently. It makes communication as simple as possible for those with speech difficulties with its products which include communication aids, environmental control devices, computer control technology and interactive learning.
To facilitate the acquisition, CareTech established a new subsidiary, Smartbox Holdings Ltd, which is 70 per cent owned by CareTech, with the remaining minority ownership held by the Smartbox management team comprising Dougal Hawes, Jarrod Inott and Hannah Church as well as previous owners Paul and Alyson Hawes.
Smartbox Holdings Ltd will pay up to £10,600,000 comprising of an aggregate initial purchase price of £7,050,000, funded through an equity contribution and loan note from CareTech and equity contribution from the minority holders of Smartbox Holdings Limited.
Smartbox generated revenue in excess of £10 million in 2019 and has a track record of profitability. It is expected that the acquisition will be earnings enhancing for CareTech in the first financial year of consolidation.
CareTech had identified diagnostic assistive technology and behavioural assessment solutions as priority areas for technology investment and adoption.
It is estimated that more than 50 million people globally could benefit from augmentative and alternative communication (AAC). Smartbox is among the top four global companies to provide complete AAC solutions. Its flagship “Grid” software supports more than 10,000 children and adults with the use of AAC every year and is translated into over 30 different languages and is supplied into as many countries.
Smartbox is the clear market leader in the UK, with approximately 50 per cent of revenues generated through NHS funding. CareTech and Smartbox both support service users with learning disabilities, autism and acquired disability for example, through stroke or brain damage following an injury. CareTech looks after more than 4,500 service users and Smartbox will help improve outcomes for those in Care Pathway’s care.
Care Pathway is also eyeing up Smartbox’s a presence in the US which represents a significant growth opportunity as the largest funded market at the forefront of AAC adoption. Alongside a reseller programme it is developing direct sales channels to grow market share significantly over the next three-five years.
Smartbox is headquartered in Malvern, UK with offices in Bristol and Pennsylvania US. The tech company was acquired by the Swiss technology company Tobii AB in 2018, but following a full inquiry from the UK Competition and Markets Authority, Tobii was required to sell Smartbox on competition grounds, providing CareTech the opportunity to secure a majority equity stake in the innovative tech firm.
Farouq Sheikh, CareTech’s Executive Chairman, said: “The Smartbox team has done a great job at creating sector-leading communication solutions for people without speech. Smartbox becoming part of CareTech will enable more children and adults with complex needs to have access to the company’s flagship assistive technology solutions.
“This partnership opens up unprecedented opportunities to blend care and technology. This will benefit the service users supported by CareTech alongside disabled people more generally and enable the Group to offer innovative solutions to both NHS and LA commissioners. Smartbox becoming part of CareTech will accelerate the development of next generation technology-enabled service models for the specialist social care sector.
Dougal Hawes, Smartbox’s managing director said: “There were multiple bidders in the sale process but CareTech was clearly the best partner for Smartbox, with a shared commitment to delivering the best products and services for the people we serve. Both CareTech and Smartbox have been helping people with complex physical and cognitive challenges for over twenty years. The combination of clinical and care experience from CareTech with technical and creative expertise from Smartbox, will bring care and technology together in new meaningful ways so everyone can participate and flourish.”