Telstra tops $100 million in healthcare investments

The communications giant has acquired a 50% stake in a health care IT business.

Justin Loiseau

Justin Loiseau hails from the great united state of North Carolina, where he started his first business at the ripe age of five: melting crayons into candles. With the infamous Crayola Crash of 1994, Justin moved on to study economics and environmental studies as a Morehead-Cain Scholar at the University of North Carolina. He has worked in a variety of sectors across the globe, from management consulting to the United Nations, and once spent three months examining invasive snails in Vietnam. Justin discovered The Motley Fool in 2012 and it’s been love ever since. Creativity, contrarianism, kerfuffling… what more could one want? When he’s not playing the Fool, you can find Justin at the University of Auckland, where he is pursuing a Masters in Economics as a Rotary Ambassadorial Scholar. Justin finds biogas digesters fascinating and can unicycle a mile in seven minutes.

Published October 1, 2013 5:30 pm AEST

Telstra (ASX: TLS) announced today that it has acquired a 50% stake in Fred IT Group, one of Australia's top health care IT companies. Although Telstra's official press release didn't disclose any financial details of the transaction, the Australia Financial Review noted that market sources priced the deal at approximately $25 million.

This isn't Telstra's first foray into health care technology, and the company is quickly working to make a name for itself in the $120 billion per year health care market. Shane Solomon, Telstra's head of health, said in a statement that he and his company "are excited by the opportunities this investment presents and we will work with the Fred IT Group to build on the great foundations they have established."

Telstra previously acquired health care software company DCA eHealth Solutions, health record company IPhealth, and appointment booking company Health Engine. Fred IT's focus rounds out Telstra's expertise in electronic prescription exchanges via cloud computing.

Foolish takeaway

A telecom company headed into health care should be enough to set "diworsification" alarm bells off in any investor's head. But don't sell so soon. Technology is a pervasive tool, and Telstra seems to be harnessing its skills to complement its steady entry into the lucrative health care market. With around $100 million already invested in health care technology market, Telstra is slowly but surely building itself a formidable force.

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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

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