Shares of Orion Healthcare Group, which develops software systems for patient health management, have been priced at $5.70, the top of the range, raising $125 million, the bulk of which is new capital.
The Auckland-based business will sell 21.1 million news shares to raise $120 million in new capital, while chief executive and founder Ian McCrae will sell a further $5 million, or 880,000 shares, into the float, it said in statement. The company was looking to raise up to $155 million IPO, and the final price set in the bookbuild values it at $915 million.
"The board has held the view that $120 million of new capital is the right amount for the business and it was a tough decision not to increase the size of the offer in the face of such overwhelming demand at the top of the price range," chairman Andrew Ferrier said. "We look forward to welcome over 20 domestic and offshore institutions and New Zealand retail investors as shareholders in Orion Health."
The company didn't provide earnings forecast in its prospectus because of the "lumpy" nature of the group's revenues for fear of misleading investors. The funds raised will be used to double the existing 40 research and development teams to accelerate its existing solutions and to undertake blue sky research on its big data analytics and predictive modelling software. The money will also go to improve implementation and delivery capability, and provide additional financial liquidity.
Orion had an annualised growth rate of 26 percent over the past 10 years, according to its offer documents. It posted a loss of $14.8 million in the six months ended Sept. 30, 2014 on sales of $80.5 million which Ferrier said had been planned for. Annualised recurring revenue, the favoured sales measure of software as a service firms, rose to $52.1 million in the first half of the 2015 year from $44.2 million as at March 31. It currently accounts for 29 percent of revenue and is forecast to reach 50 percent within five years.
Deutsche Craigs and First NZ Capital were joint lead managers in the offer, which doesn't have a public pool. The broker offer opens on Monday, and runs until Nov. 21. It will debut in a dual-listing on the NZX and ASX on Nov. 26.