Careteq Ltd (ASX: CTQ) has entered into a binding agreement to divest its main operating business, Embedded Health Solutions (EHS), for $5 million cash to Nationwide Investments Holdings Pty Ltd. The Careteq EHS Business Sale is subject to shareholder approval at an Extraordinary General Meeting scheduled for 13 March 2026, with completion expected around 20 March 2026.
Careteq secures $5 million cash deal for EHS divestment
The healthtech company announced the transaction on 6 February 2026, marking a significant corporate restructure that will see it exit aged care medication management services to focus on its HMR Referrals platform. The sale enables Careteq to recalibrate its balance sheet and better position itself to defend its ongoing dispute with the Australian Taxation Office (ATO), which currently sits in the objections phase.
The transaction’s key features include:
- Cash consideration of $5,000,000 (subject to customary purchase price adjustments)
- Shareholder approval required at an EGM on 13 March 2026
- Strategic refocus on the HMR Referrals marketplace platform for home medication reviews in the home care sector
The Board ran a confidential and targeted process to identify suitable acquirers and reached agreement with Nationwide Investment Holdings following an internal review of the company’s financial obligations and ongoing regulatory matters.
What is Embedded Health Solutions?
Embedded Health Solutions provides medication management services across residential aged care facilities, home care providers, and healthcare professionals. For investors unfamiliar with this sector, EHS delivers clinical pharmacy support directly at care facilities rather than through traditional pharmacy channels.
The business offers four main service categories. On-site clinical pharmacy services include medication reviews and Quality Use of Medicine programmes delivered by accredited pharmacists. Staff training covers specialised topics such as analgesics and psychotropic medicines for registered nurses and healthcare staff. Technology solutions encompass software and reporting tools for benchmarking and compliance. Systems integration optimises patient care and workflow efficiency.
EHS represents Careteq’s core revenue-generating operation. The comprehensive service model combines clinical expertise with technology platforms to address medication safety and compliance requirements in aged care settings. Residential Medication Management Reviews (RMMRs) form a central component of the service offering, providing systematic assessment of residents’ medication regimens.
Why Careteq is selling its main business
Following an internal review of the company’s financial obligations and the ongoing ATO matter in the objections phase, the Board reached the decision to divest EHS. The transaction enables three strategic objectives: growing the HMR Referrals marketplace platform, recalibrating the balance sheet, and defending the company’s position with the ATO regarding current R&D claims during the formal objection process.
The sale proceeds are intended to be allocated across these priorities. Capital will be directed toward expanding the HMR Referrals platform, which targets the home care sector rather than residential aged care. Balance sheet restructuring addresses the company’s financial position following the dispute with the tax office. Funds will also support the company’s defence through the ATO objections process.
Management confirmed there will be no changes to Careteq’s board or management following completion of the transaction. The divestment represents a strategic reset rather than a distressed exit, with the Board conducting a confidential and targeted acquisition process before selecting Nationwide Investment Holdings.
Board Recommendation
“The Directors unanimously approve the proposed divestment of EHS on the terms outlined in this announcement and will recommend that shareholders vote in favour of the transaction in the absence of a superior competing proposal.”
About the acquirer
Nationwide Investments Holdings Pty Ltd (ACN 664 833 970) is a privately owned Australian investment vehicle established specifically to acquire and operate Embedded Health Solutions. NIH is ultimately controlled by Mr Renato Del Monaco, an Australian businessman and principal of the Del Monaco Group, a privately held group with established interests across commercial property investment and operating businesses.
Mr Del Monaco has extensive experience in the acquisition, funding, and operation of businesses and assets, having been involved in transactions of comparable scale across multiple sectors. NIH will be responsible for the ownership, funding, and ongoing operation of the EHS business following completion.
Given NIH’s status as a private entity with limited publicly available information, Careteq undertook due diligence to assess its financial and operational capacity. The company obtained and reviewed ASIC company searches for NIH and related entities, obtained written confirmation regarding source of funds including arranged debt facilities, conducted background and bankruptcy checks on directors and key shareholders, and reviewed information on NIH’s track record in establishing and funding businesses.
Based on these enquiries and supporting documentation, the Careteq board confirmed it is satisfied that NIH, together with its shareholders and funding arrangements, has the financial and other capacity to perform its obligations under the sale agreement.
Transaction terms and timeline
Under the sale agreement terms, NIH will acquire the EHS business for consideration of $5,000,000 in cash, subject to customary purchase price adjustments. The purchaser will acquire all assets comprising the EHS business, including all related intellectual property, key employees, key clients, and brand assets. Title and ownership will pass from Careteq to NIH on completion.
| Milestone | Date | Status |
|---|---|---|
| Binding agreement signed | 6 February 2026 | Complete |
| EGM for shareholder approval | 13 March 2026 | Pending |
| Expected completion | ~20 March 2026 | Pending |
| ASX compliance deadline | 6 August 2026 | Pending |
The transaction requires shareholder approval due to its material nature. Careteq shareholders will receive a Notice of Meeting and accompanying Explanatory Memorandum containing full details of the proposed transaction and next steps ahead of the EGM.
Each Director who is also a shareholder intends to vote in favour of the proposed transaction in the absence of a superior competing proposal, providing a confidence signal regarding Board alignment on the strategic rationale.
ASX listing considerations
The disposal of Careteq’s main undertaking raises considerations under ASX Listing Rule 12.1 and 12.2, which require a listed entity to satisfy ASX on an ongoing basis that the level of its operations is sufficient, and its financial condition adequate, to warrant continued quotation of its securities.
ASX has advised that Careteq will be afforded a period of 6 months from the date of agreement of the disposal (by 6 August 2026) to demonstrate compliance with Listing Rule 12.1. The company will advise the market when it enters into that agreement, which will occur following the shareholder approval meeting. If Careteq does not demonstrate compliance to ASX’s satisfaction by the 6-month anniversary, ASX will suspend trading in its securities.
The disposal also means that any future transaction Careteq proposes may, if required by ASX, attract the application of Listing Rule 11.1.3. As a result, the company may be required to re-comply with Chapters 1 and 2 of the Listing Rules for certain transactions.
For retail investors, this creates a defined timeline for assessing the company’s post-transaction operating profile. The 6-month compliance window provides clarity on when Careteq must demonstrate to ASX that its remaining operations (primarily the HMR Referrals platform) meet listing requirements. The potential requirement to re-comply with initial listing chapters for future acquisitions means shareholders should expect additional scrutiny and approval processes if management pursues growth through acquisition.
HMR Referrals becomes Careteq’s core focus
Following completion of the EHS divestment, Careteq’s operations will centre on the HMR Referrals platform. This marketplace connects accredited pharmacists with home care providers requiring Home Medicines Reviews (HMRs) in the home care sector. The platform operates as a technology-enabled matching service rather than a direct service delivery model.
Home Medicines Reviews involve a pharmacist visiting a patient’s home to assess their medication regimen, identify potential issues such as drug interactions or adherence problems, and provide recommendations to the patient’s general practitioner. The HMR Referrals platform streamlines the process of connecting care providers who need these reviews with qualified pharmacists who can deliver them.
The post-transaction company represents a shift from labour-intensive service delivery (EHS’s on-site clinical pharmacy model) to a technology platform business model. This repositions Careteq as a single-asset healthtech operation targeting the home care market rather than residential aged care facilities.
What this means for Careteq shareholders
The transaction delivers three primary outcomes for investors. The $5 million cash injection provides immediate balance sheet strengthening and capital for strategic deployment. The strategic refocus concentrates resources on a single growth platform (HMR Referrals) rather than maintaining a diversified service business. The proceeds enable the company to fund its defence in the ongoing ATO dispute while pursuing platform expansion.
The Directors unanimously recommend shareholders vote in favour of the transaction in the absence of a superior competing proposal. Each Director who holds shares intends to vote accordingly, demonstrating Board confidence in the strategic rationale and transaction terms.
Shareholders will receive a Notice of Meeting and detailed Explanatory Memorandum ahead of the 13 March 2026 EGM, providing comprehensive information to inform their voting decision.
Key shareholder considerations include:
- Cash proceeds provide runway for HMR Referrals growth and ATO defence positioning
- Strategic refocus on technology platform model versus service delivery operations
- ASX compliance timeline requires demonstration of sufficient operations by 6 August 2026
The transaction fundamentally reshapes Careteq’s operating profile from a diversified medication management services business to a focused healthtech platform targeting the home care sector. Investors should assess whether this strategic pivot aligns with their investment thesis, particularly given the company’s need to demonstrate ongoing listing compliance within six months of completion.
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