Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Software of Excellence makes US acquisition

July 8th 2004

Software of Excellence makes US acquisition

and gains cornerstone shareholder

Software of Excellence International today announced that it has agreed to buy a United States-based competitor in the dental school software market, a move that will add 16 US dental schools to the New Zealand company's existing customer list.

The acquisition will make Software of Excellence the largest supplier of clinical and administrative software to dental schools and hospitals in the US and the world, with a combined installed base of 27 such institutions.

Software of Excellence is partly funding the purchase of General System Design Inc and associated ClaimsPro Inc (GSD) with a $2.5 million placement of 1,666,667 Mandatory Convertible Notes to a new cornerstone shareholder, Sydney-based Co-Investor Group, and other investors.

Additionally, Software of Excellence is seeking to raise $5.1 million with a renouncable offer of one mandatory convertible note for every eight ordinary shares or existing convertible notes on the same terms as those taken up by Co-Investor. The notes will have an issue price of $1.50 each, convert to shares on a one-for-one basis after three years and carry an interest rate of 7 per cent. Co-Investor has underwritten $2.5m of the rights issue with a minimum of $1.3m of notes to be place with Co-Investor either from any rights issue shortfall or from a subsequent placement if there is no shortfall.

Under this structure the company will raise a minimum of $5m, and a maximum of $8.6m if the rights issue is fully subscribed.

Co-Investor, which is headed by expatriate New Zealander Roger Sharp, is an active investor in smaller Australian and New Zealand companies such as Software of Excellence. Before forming Co-Investor, Mr Sharp was a senior executive of ABN AMRO Bank where he held the roles of Global Head of the Technology Sector in London, and CEO of ABN AMRO Asia based in Hong Kong.

It is planned that Mr Sharp will join the Software of Excellence board and will support the company as it pursues its growth strategy.

Software of Excellence Chairman Jim Syme said the involvement of a cornerstone shareholder and Mr Sharp would enable Software of Excellence to follow a more aggressive growth strategy and to address the many opportunities for expansion it faced, particularly in the United Kingdom and the US.

The additional funds being sought in the rights issue would be used to complete the funding of GSD and add to the growing cash surplus from operations which will be held for possible acquisition opportunities within the speciality areas in which Software of Excellence operated.

Executive Director Paul Weatherly said consideration for the purchase of GSD was US$2.45million and will add revenue of approximately US$1.7 million in YE March 2005, and US$2.0m in subsequent years. Of this around US$1m is recurring revenue. GSD will provide Software of Excellence with a solid foundation and additional experienced people so that it could more rapidly grow its US business operations.

By moving to consolidate the dental school and hospital market, and by providing a leading product, Software of Excellence was seeking to reduce risk for customers and make its own market niche more secure.

"This acquisition is a strong signal to the US and global Enterprise market that we are now the major player in the field of clinically-driven dental software for dental schools and hospitals. With GSD we now have a more than 30 per cent share of the US dental school market.

"Additionally our involvement will provide GSD's existing customers, many of whom were operating on centralised computer platforms, an improved upgrade path."

GSD employs 11 people and is based at Cedar Rapids, Eastern Iowa. The company provides "shrink wrapped" practice management software for dental and medical clinics as well as tailored dental school faculty management software. Both are marketed under the "Quick Recovery" brand, but the company's main focus is on meeting the dental software needs of academic institutions.

GSD also operates a claims and statement processing business which offers its users savings in postage and handling as well as facilitating the recovery of health insurance claims for dental services.

Previously the Software of Excellence's directors have said they expected that EBITDA and net profit margins would continue to improve both in real terms and as a percentage of revenue, improving from 6 per cent of revenue in 2004 to about 10% in 2005 and 24% by 2007. The GSD acquisition is expected to accelerate this improvement, with 2005 EBITDA/Sales now expected to be around 13%, rising to around 30% by 2007.

The record date for the one-for-eight issue is expected to be the 23rd of July subject to finalising the prospectus.


© Scoop Media

Business Headlines | Sci-Tech Headlines


ScoopPro: Helping The Education Sector Get More Out Of Scoop

The ScoopPro professional license includes a suite of useful information tools for professional users of Scoop including some specifically for those in the education sector to make your Scoop experience better. More>>

Big Tax Bill Due: Destiny Church Charities Deregistered

The independent Charities Registration Board has decided to remove Destiny International Trust and Te Hahi o Nga Matamua Holdings Limited from the Charities Register on 20 December 2017 because of the charities’ persistent failure to meet their annual return obligations. More>>

57 Million Users' Data: Uber Breach "Utterly Preventatable"

Cybersecurity leader Centrify says the Uber data breach of 57 million customer and driver records - which the ride-hailing company hid for more than a year - was “utterly preventable”. More>>

Scoop 3.0: How You Can Help Scoop’s Evolution

We have big plans for 2018 as we look to expand our public interest journalism coverage, upgrade our publishing infrastructure and offer even more valuable business tools to commercial users of Scoop. More>>

Having A Cow? Dairy Product Prices Slide For Fourth Straight Auction

Dairy product prices fell at the Global Dairy Trade auction, retreating for the fourth straight auction amid signs of increased production... Whole milk powder fell 2.7 percent to US$2,778 a tonne. More>>


Statistics: Butter At Record $5.67/Block; High Vegetable Prices

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017. More>>


Science: New Research Finds Herbicides Cause Antibiotic Resistance

New University of Canterbury research confirms that the active ingredients of the commonly used herbicides, RoundUp, Kamba and 2,4-D (glyphosate, dicamba and 2,4-D, respectively), each alone cause antibiotic resistance at concentrations well below label application rates. More>>