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

 

OceanaGold: Man Killed In Waihi Mine Accident

A 29-year-old man had died following a work place accident at OceanaGold mine, Waihi last night. The man was killed after the front end loader he was in rolled down a slope. The accident happened at approximately 6.30pm on Thursday night. More>>

ALSO:

Constructing Consent: Annual Housing Consents Highest In Over A Decade

More than 29,000 new homes gained building consent in the year to June 2016, up 16 percent from the previous June year, Statistics New Zealand said today. More>>

ALSO:

War Against Weevil For Future Peas: “No Peas, No Weevil” Ban Now In Place In Wairarapa

The Ministry for Primary Industries (MPI) has today placed a ban on growing peas within a specified area and placed controls on moving pea material (seed and untreated pea straw) within, in and out of this area for the next 2 years. More>>

ALSO:

Wood Producers: Crisis In New Zealand Log Supply

New Zealand wood processing leaders held a hui with senior government officials and political leaders in Whangarei yesterday to assess the acute log supply shortage to local mills in Northland. More>>

Consents And Taxes: Trustpower 'Very Disappointed' With Judgement

Trustpower is "very disappointed" with a Supreme Court ruling dismissing its bid to claim tax deductions on $17.7 million of project costs in a case closely watched by large-scale infrastructure developers. More>>

ALSO:

Fruitful Endeavours: Kiwifruit Exports Reach Record Levels

In June 2016, kiwifruit exports rose $105 million (47 percent) from June 2015 to reach $331 million, Statistics New Zealand said today. Overall, goods exports rose $109 million (2.6 percent) in June 2016 (to $4.3 billion). More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news