Welfare Denmark see future investment potential

As the demand for welfare technology increases, Welfare Denmark, which is only one year old, sees the opportunity to market themselves as a positive business investment and has put a large price tag on the company.  Potential deals could be made up from investors or as an acquisition.

Over the next month, three Chinese billionaires will visit Esbjerg. They are going to negotiate a purchase of Welfare Denmark, with a value in the triple-digit million DKK range. Welfare Denmark was formed in 2012.

Welfare Denmark is an IT-controlled rehabilitation program based on Microsoft’s Kinect technology, known as X-Box 360.

The virtual rehabilitation program has apparently hit a gold mine and, according to co-owner and managing director Ulrik Møll, the only thing missing is an investor who can help to spread the solution around the world. Quickly.

Help from investors

“Negotiations are already ongoing. And the interested investors will be able to help us to get the solution around the world market through their network,” says Ulrik Møll.

It is difficult to put an actual figure on the value of the company; insiders are talking of triple-digit million DKK. There are many possible acquisition scenarios. It could be anything from 20 to 100% of the company, which is sold and additionally, percentages of the subsequent sale of the rights and licenses shall be negotiated.

Many solutions

“All of this depends on the contractual basis which can be put together in many ways,” explains the managing director, who may well imagine six figure sum.

“We are quite sure of an amount in the triple-digit million range, because it is simply how much we, at least, are worth. It is the general consensus,” says Ulrik Møll, who is one of the six owners in a joint venture in which everyone can look forward to getting a reasonable amount paid out from a sale.

According to Ulrik Møll it is important that the company finds an investor quickly and he expects that the buyer will come from China or the Middle East.

Welfare Denmark named as MS Innovation Award Winner 2013

“The market requires a solution here and now. Microsoft has helped us to find a number of rich Chinese investment consortia to whom we recently presented an investment proposal. They think it is interesting that three of them come to visit us immediately,” he says.

At Healthcare Denmark, which is a consortium of Danske Regioner (Danish Regions), Region Syd (The Region of Southern Denmark), Danish Industry (The Confederation of Danish Industry), several ministries and the companies Cowi, Falck, KMD and Systematic, also think that the market is mature for Welfare Denmark’s solution. Because it is already being used on the Danish market, it means that it is also good timing for investors to invest.

Good timing

“I believe that some investors will think that this solution is ingenious. For some types of solutions, the market is not yet mature, but if you look specifically at what Welfare Denmark offers, namely virtual rehabilitation, I agree that it is good timing to come out. The investors gain a foothold within the welfare technology area, which they can use to develop; and later on they can introduce solutions which have not yet been developed,” says managing director of Healthcare Denmark, Hans Erik Henriksen.

He thinks that it is strategically important for many countries to have a solution which Welfare Denmark offers.

“The challenge for all countries is that you need to transform the health care system and get some of the rehabilitation efforts into the homes. It is necessary to get patients released faster from the hospitals. The developed countries have an ever increasing aging population and in the developing countries, such as China and Latin America, they also need technology, which they can support in their own homes,” he says.

Selling Welfare Denmark will result in a lot of new jobs in Denmark. The ambitions are high, but with a financially strong investor at its side and a close partnership with Microsoft at the other side, Ulrik Møll thinks that the product can quickly be released in many countries.

“I would dare claim that from when we are acquired, we can employ 100-200 employees just like that in various areas, who shall service both at home and abroad,” he says and adds that there are about 20 employees today.

Chinese investment consortia are interested in Welfare Denmark

They may buy the rights

The plans are for an outright sale to the Chinese, who will arrive in Esbjerg in the coming month. However, should this not come to fruition, a lot of money can still be made. If the Chinese buy only the rights to get the solution into China, they must pay a six figure sum.

“We would also be happy about that,” says the managing director, who – just like his co-owners – has no plans to leave the company after a sale.

“None of us want to leave this. I dare claim that Welfare Denmark is one of the most exciting companies to work with.” says Ulrik Møll.
FACTS – Leading welfare technology

• Welfare technology is a generic term of technological solutions to welfare services, such as care for the elderly, rehabilitation and disability assistance.

• Denmark is among the best in the world to combine new technology and lower health care costs and there are major export opportunities in the Danish welfare technology.

• According to DI (The Confederation of Danish Industry), the Danish health and welfare solutions have an export potential which is that large that it could create 10,000 new private Danish jobs.

• Danish welfare technology currently employs more than 9,000 private employees within aids, healthcare-IT and operating solutions.

Source: Welfare Denmark/Børsen