NetScientific PLC (AIM:NSCI), a venture capital investment group focused on deep tech and life sciences, said it has acquired a 30% stake in Wanda Connected Health Systems.
Operating in the UK and US, Wanda Health provides remote patient monitoring and virtual healthcare services. This technology allows doctors to monitor patients from a distance, reducing the need for hospital visits. The platform collects data from patients' homes and alerts doctors if there are any health concerns.
In 2019, NetScientific sold its majority stake in the US arm, Wanda Inc, to Deeptech Disruptive Growth Investments because it could no longer financially support the company. The sale was managed by EMV Capital, which was later acquired by NetScientific.
Since then, Wanda has evolved significantly. The company has moved from research and development to a more commercial focus. It has developed new products, established strategic partnerships, and increased sales. These efforts have made Wanda a stronger and more viable business, according to NetScientific.
Dr Ilian Iliev, CEO of NetScientific, played a crucial role in this transformation. He was appointed chairman when Deeptech acquired it in 2019. Under his leadership, the company has streamlined its operations and prepared for further growth and fundraising.
To expand its reach, Wanda Health was created in 2020 to bring its technology to the UK and Europe. Wanda Health recently acquired Wanda US’s shares from Deeptech, consolidating both entities under one corporate umbrella. This restructuring aims to attract third-party investments and benefit from the UK's Enterprise Investment Scheme (EIS), which offers tax relief to investors.
NetScientific’s investment in Wanda Health was partly settled by converting a service fee of £62,658 into shares, resulting in a 30% ownership stake. Last year, Wanda Health and Wanda US reported a combined loss before tax of £1.5 million.
The deal also involves terminating a management agreement between EMV Capital and Deeptech, which is related to Wanda and another company that Deeptech has since sold. NetScientific will now directly benefit from any increase in Wanda Health’s value.
Additionally, NetScientific has signed two new service agreements with Wanda Health. These include advising on fundraising efforts and providing business growth services, for which NetScientific’s subsidiaries will receive fees.
The transactions are classified as related party transactions because Deeptech is primarily owned by Melvin Lawson, a major shareholder in NetScientific, and Iliev. NetScientific’s board, excluding Iliev, believes these deals are fair and reasonable for shareholders.
"NetScientific is pleased to secure a 30%. direct stake in Wanda, which meets our criteria for deeper involvement in selected portfolio companies, focused on delivering enhanced shareholder returns," said Iliev.
"We re-gain an interest in a significantly strengthened and de-risked version of Wanda, at a time when we see significant upside potential for the business in a transformed digital healthcare market.
"We look forward to working closely with Wanda's management team on the proposed fundraising and to deploying our value creation services team to drive growth in the fast-growing remote patient monitoring market."