Three shortlisted bidders circle HealthBeacon as examiner sets date for final offers

The examiner of HealthBeacon has drawn up a shortlist of three bidders for the embattled medical technology firm in advance of final offers being called on December 12th.

The final parties are understood to include US home appliances distributor Hamilton Beach Brands, which has an existing partnership with the business and committed to fund HealthBeacon’s examinership. It is believed an Irish-based company and another US-headquartered business are also in the final list.

The High Court appointed insolvency practitioner Shane McCarthy of KPMG as examiner to HealthBeacon at the end of October – initially on an interim basis – after it was told the company had “run out of cash” and needed external funding to meet its immediate commitments, including payroll.

Examinership, which affords a company a period of court protection from creditors as a survival plan is drawn up, usually lasts 70 days but can be extended to 100 days.

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Mr McCarthy filed a report with the court late last week saying he had received 12 expressions of interest in the company last month, before whittling the list down to three preferred bidders on November 23rd.

The three, which he did not identify, have since been given access to a virtual data room containing details of HealthBeacon’s finances and other relevant material and will have an opportunity to speak to management in the coming days.

“A deadline of 12 December, 2023 has been set for receipt of final offers,” he said. “If required I will engage with preferred bidders between 13 and 14 December 2023 and a final decision on the successful bidder should be made no later than 18 December 2023.”

[ High Court appoints interim examiner to HealthBeacon as it has ‘run out of cash’ ]

The publicly quoted company had an initial market value of €98 million when it floated in Dublin in December 2021 with an ambition of accelerating the rollout of its flagship product, a digital sharps disposal bin for needles and syringes that reminds patients to stick to injection schedules at home.

However, its market capitalisation had collapsed to €1.18 million by October 13th, when its shares were suspended, as investors fretted about the company’s ability to remain in business as it burned through cash.

A shock sales warning in September saw HealthBeacon pull its previous targets that annual recurring revenues (ARR) would be about the “mid-teens” million-euro level by the end of this year and rise to €25 million by the middle of 2024.

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Instead, it said the ARR run rate would only be €3.2 million by the end of this year and €17 million by the end of next year.

Its founding chief executive, Jim Joyce, was ousted from his role in September. Independent director and venture capital specialist Rebecca Shanahan was appointed as interim chief executive.

While the company had been successful in striking big distribution deals with US speciality pharma groups, it was caught out by the red tape involved in rolling them out. Its current timelines are running up to nine months behind estimates.

HealthBeacon had also started to sell its product directly to consumers in the US in 2021 through Hamilton Beach Brands. The partnership was widened earlier this year, with Hamilton Beach Brands also taking on the management of the Irish company’s supply chain in the US.

Mr McCarthy said the company continues to receive “very good support” from its customers and suppliers. Since his appointment on October 27th, it has earned revenue of €215,000 and incurred €824,000 of expenditure, in line with management’s trading projections.

While it was initially estimated that Hamilton Beach would have to provide €1.86 million of loans to fund HealthBecaon’s examinership, Mr McCarthy now estimates the requirement will be lower, at €1.78 million.