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

 


Debt-free Gentrack would look at acquisitions up to $20M

Debt-free Gentrack would look at acquisitions up to $20M after IPO

By Jonathan Underhill

May. 26 (BusinessDesk) - Gentrack Group, the utility and airport software company going public next month, would look at acquisitions of up to $20 million to add compatible software or enter new markets after an initial public offering that will leave it debt free and allow the owners to sell down their holdings.


The Auckland-based company counts Genesis Energy, Meridian Energy, MightyRiverPower, Australia's Origin Energy and the UK's SembCorp Bournemouth Water among the electricity and water utility customers for its Gentrack Velocity billing product. Airport companies that use its Airport 20/20 management system include Auckland International Airport, Sydney Airport, Hong Kong International Airport and John F Kennedy International Airport.


It competes with SAP and Oracle for utility billing systems and with Lockheed Martin, SITA and AirIT for airport systems, according to the prospectus released today. It plans to use existing earnings to expand into new countries and markets and has been monitoring some smaller companies as potential acquisition targets "for some time," executives said on a conference call.


"Given its strong balance sheet, Gentrack retains the ability to take on debt to fund acquisitions," the company said. That may include a billing company in the US, for example, and could be funded by a mix of cash and debt.


Gentrack took on debt to fund the $54 million management buyout in 2012 that resulted in chairman John Clifford and executive director James Docking each hold 21 percent of the company, which currently has a total of 21 shareholdings. The $33 million debt component of that transaction plus costs associated with the IPO will use all of the proceeds of the sale of new shares, about $36 million. After the IPO, the existing owners will hold between 41.5 percent and 43.5 percent of the company, receiving the balance of the up-to $101.8 million the sale will raise.


The shares will be offered at an indicative price range of $2 to $2.50, valuing the Auckland-based company at between $151.4 million and $180.2 million, according to Gentrack's prospectus. The offer will comprise 14.4 million to 18 million of new shares and 26.3 million of existing shares. The bookbuild, pricing and allocation will be determined on June 5 for an offer that will open on June 9 and close on June 20, ahead of an expected June 25 listing on the NZX and ASX.


Gentrack has an implied cash dividend yield of 1.4 percent to 1.7 percent for 2014, rising to 4.5 percent to 5.4 percent in 2015, according to the prospectus. According to its forecasts, revenue rises to $40.6 million in 2014 from $40.1 million in 2013, before climbing to $44.7 million in 2015. Net profit would be $3.7 million this year and $9.3 million in 2015.


(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Finance: Major Campaign To End "Gross Overtaxation Of Savings"

The campaign – which includes a special web site through which New Zealanders can e-mail their own and other MPs and party leaders – is backed by Age Concern, Consumer NZ, the Financial Services Council and the Taxpayers’ Union. More>>

ALSO:

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news