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[Exclusive] Digital healthcare

Naver to enter healthcare business in Korea with investment in ezCaretech

The expected equity investment will likely expand Naver’s overseas healthcare business beyond Japan

By Aug 25, 2021 (Gmt+09:00)

The online healthcare service market is growing rapidly (courtesy of ezCaretech)
The online healthcare service market is growing rapidly (courtesy of ezCaretech)

South Korea’s online platform giant Naver Corp. is set to enter the big data-based healthcare industry by investing in ezCaretech Co., a domestic medical IT service provider.

According to investment banking sources on Tuesday, Naver plans to acquire a 10% stake in ezCaretech for about 30 billion won ($26 million).

The two companies are in the final stage of talks and could sign a deal by the end of this month at the earliest, the sources said.

If a deal is clinched, Naver will become ezCaretech’s second-largest shareholder following top shareholder Seoul National University Hospital.

A Naver official said “nothing has been decided yet” on the deal.

Established in 2001, ezCaretech is a leading provider of electronic medical record (EMR) and electronic health record (EHR) systems at hospitals in Korea and abroad.

Started with Seoul National University Bundang Hospital in 2003, the company has installed such systems in major Korean hospitals, including Seoul National University Hospital, Ewha Womans University Medical Center and Gachon University Gil Medical Center

The company has also supplied the systems to hospitals in the US, Saudi Arabia and the UAE.

ezCaretech
ezCaretech

Listed on the tech-heavy Kosdaq market, ezCaretech posted 76.9 billion won in sales last year.

Shares of ezCaretech rose 17.4% at 52,400 won in early Wednesday trade in Seoul, outperforming the benchmark index’s 0.2% fall.

CLOUD EMR SERVICE

Analysts say Naver aims to expand its business scope to the digital healthcare business just like Amazon, Google and Apple, which also offer such services.

“ezCaretech has accumulated the EMR/EHR system management know-how since the early 2000s and Naver, as an IT company, has strong expertise in data management and cloud services. A combination of the two would create synergy in digital and remote healthcare services,” said an industry official.

If Naver acquires a stake in ezCaretech, it plans to initially focus on cloud EMR services.

An ezCaretech official explains about its EMR, EHR system
An ezCaretech official explains about its EMR, EHR system

ezCaretech has largely supplied its cloud EMR service to small and medium-sized domestic hospitals as large, general hospitals often run their own services with independent servers.

Industry officials said the domestic EMR service market has huge growth potential. Currently, there are 343 general hospitals with a combined 149,282 beds and 32,289 smaller hospitals with 236,243 beds in Korea, according to data from Statistics Korea.

Naver is already involved in the remote medical service business in Japan through its affiliate LINE Corp.

Naver already offers a remote healthcare service in Japan.
Naver already offers a remote healthcare service in Japan.

LINE and M3 Inc., a Sony affiliate, jointly launched an online healthcare business, LINE Healthcare Corp., in 2019.

Once Naver acquires a stake in ezCaretech, it will be able to expand its overseas healthcare services in other countries as well, industry officials said.

According to market researcher Statista, the global healthcare market is forecast to grow to $206 billion by 2060 from $172 billion in 2019.

Write to Min-Ki Koo and Jun-Ho Cha at kook@hankyung.com

In-Soo Nam edited this article.

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