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Gentrack IPO priced top end of range

Software developer Gentrack’s [NZX: GTK] initial public offer has been priced at $2.40 a share mid-way through the book-build.

UBS closed the book on Thursday night, according to the Australian Financial Review. The final price was toward the top end of the $2 to $2.40-a-share indicative range set out in the prospectus.

Gentrack, which develops software for utilities companies worldwide, will raise $36 million in new capital and sell a further 26.3 million existing shares for a total offer size of $99 million, the company confirmed this morning.

Gentrack plans  to list in New Zealand and Australia on June 25. Existing shareholders will retain a 43.2% stake in the company.

The Price implies Gentrack will have a total of 72.7 million shares on issue and a market capitalisation of $174.5 million.

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.

Gentrack chairman John Clifford says investors were clearly impressed by the Company’s proven revenue and earnings record and its future prospects.

“Gentrack is heartened by the keen interest from institutional investors in New Zealand and Australia, as well as strong retail interest. Their support of the offer has led to the price being set at the upper end of the indicative range of $2.00 to $2.50 a share. The successful IPO positions the Company to build on its strong track record of delivering mission critical software solutions to customers in New Zealand and overseas.”

The retail offer, which is available only to clients of participating brokers in New Zealand and eligible Gentrack employees, will open on 9 June 2014 and close on 20 June 2014.

Comments and questions

Scaling was brutal at the discount brokers.

Scaling was brutal for a number of insto's as well.

Is there a maximum amount of shares per buyer?

Finally a tech company I can get on board with - one with growth but more importantly earnings and great cash-flow....

Are they getting out?