Software company Orion Health is planning to sell some of its business and buy back shares in a bid to improve its finances.
The company plans to sell its top performing Rhapsody business, which pulls together patient data from various sources, to British technology investor Hg for $205 million.
Orion will then buy back a quarter of the business for $28m.
Hg will take a 24.9 percent stake in a second business, Population, for $20m, but Orion will invest a total of $42m into the division to fund its day-to-day operations.
Orion will retain full ownership of its Hospitals division.
It has developed various software products for health authorities, hospitals, and private practices to collect, manage and share patient information.
However, it was forced into cutting costs, sacking staff and a review of operations as it failed to meet revenue targets, and struggled to get contracts settled and into operation.
"We received strong interest in Orion Health's business throughout the strategic review process and the board and I believe that Hg is the right partner to accelerate the expansion of Rhapsody and support our vision for Population Health," Orion chief executive and major shareholder Ian McCrae said.
The company's loss for the March year rose 21 percent to $40.4m, with its revenue falling more than its costs.
It has forecast a smaller loss in the year ahead with its underlying earnings moving to break-even.
Orion is also offering to buy back shares from investors, who can choose to sell none, 20, 50, or 100 percent of their stake in a range between $1.24 to $1.29 a share, which was 29 percent above its closing price on Monday.
Orion was once a high-flying share market favourite, hitting a high of $6.54 a share shortly after listing in late 2014, but hit a record low of 57c in April. It rose 29 percent to $1.08 in early trading after news of the deal.
The Hg deal is being backed by Orion's board, but will be put to shareholders for approval.