Healthcare technology provider HomeStay Care Limited (ASX:HSC) has entered into a binding Heads of Agreement with Automation Australia Pty Ltd trading as Essence APAC to become their exclusive reseller of healthcare associated solutions in Australia, New Zealand and Singapore.
The Agreement accelerates HomeStay’s go-to-market strategy and will potentially result in a near-term step up in revenues due to existing and pipeline Essence APAC revenues transferring to HomeStay from 10 July 2019. It gives HomeStay the exclusive right to market, distribute and sell all Essence APAC healthcare associated solutions, including Essence Group healthcare-associated hardware, software solutions and peripherals.
Essence APAC is a technology distribution and development company that is the owner and licensee for a range of healthcare associated solutions within the Asia-Pacific region (Essence APAC Solutions). This suite of ‘smart living’ solutions includes a wide range of technology such as discreet personal emergency systems, motion, magnetic and thermal sensors that analyse the activities of daily living. These products interface with the Homestay software platform to provide daily dashboard reporting and connectivity to family and carers. The combination of robust hardware and connective real time data reporting enables safer, independent living for older people and those living with disability who want to stay living in their own home. Essence APAC is an exclusive distributor in Asia-Pacific of health, safety, automation and security solutions for Essence Security International Ltd (Israel technology company). Essence APAC also owns all rights to key integration software solutions required for the Essence Group platforms to communicate to local monitoring services. In FY19 Essence APAC generated healthcare solutions revenue of A$1.94 million in the health, aged care and disability sectors.
Essence Security International Ltd is a privately held, global company, founded in 1994 by its Chairman and CEO, Dr Haim Amir. Over the past 25 years, Essence Security International Ltd has built an impressive installed base, with 30 million systems deployed and used by Tier-1 service providers worldwide. Essence Security International Ltd is committed to developing and supporting solutions that both enhance partners’ businesses and enable people to live a fuller and better life.
HomeStay currently uses Essence APAC technology in its Intelligent Home solution, in particular the home monitoring sensors and emergency pendant that detect movement (or lack of movement) in the home and provide access to emergency services via the hub and call centre. This Agreement secures HomeStay’s access to product supply in Australia and creates an opportunity to expand its offering within the Asia-Pacific region further. The Essence APAC team will continue to work closely with HomeStay to provide ongoing executive sales, advisory, technical and logistics support services at agreed commercial rates.
The synergies of these services will provide better efficiencies to HomeStay’s operations and cost reductions.
Pursuant to the Agreement, HomeStay will pay Essence APAC a 4% royalty on all sales generated. To retain exclusivity, HomeStay must purchase a minimum of US$1 million per annum of Essence APAC during the three-year term.
The Agreement enables HomeStay to capitalise on the traction made by Essence APAC in the aged care sector in the Territory and expand healthcare offerings further in the disability sector. HomeStay will continue to supply technical support to all current customers including the additional Essence APAC clients, resellers and partners in line with Essence APAC’s current pricing structure. As the exclusive licensee of Essence APAC, HomeStay will purchase products via Essence APAC at wholesale rates plus an agreed mark-up.
HomeStay recently launched its webstore which provides a digital platform for all customers, making seamless purchasing of an expanded catalogue of products and solutions possible. These solutions can be integrated with HomeStay Connect Apps and other services, as applicable. HomeStay looks forward to expanding products available on the webstore further as part of making more Essence APAC Solutions available for purchase online over the coming weeks.
CEO of HomeStay, Philippa Lewis said, “We are pleased to be appointed the exclusive Licensee for Essence APAC. This is a strategic opportunity for HomeStay, opening new markets and working with an experienced successful team. We look forward to working closely with Essence APAC to rapidly integrate their customers and to expand the HomeStay business. We are particularly excited to be accessing the Essence APAC solutions, expanding specialised products to the healthcare, aged care and disability sectors. This agreement provides the foundation into new markets as well as potential revenue growth.
The demand for our technology is growing and our relationship with Essence APAC is pivotal in securing expanded footprint across the multiple verticals. This agreement will further our objective to provide greater choice to our customers who seek smart-care solutions, that make a meaningful impact on their safety, wellness and independence.
Essence APAC Managing Director, Graham Russell said, “We are excited to be working with such an innovative company like HomeStay. We look forward to expanding our sales and marketing reach to allow more elderly and disabled people to live independently in their own home for longer. I feel this deal will bring a greater level of support to our existing resellers and clients, as well as offer them access to further HomeStay solutions.”