New Zealand company Atlantis Healthcare, which has operations in nine countries and aims to become a world leader in its field, has sold a 50-percent stake to a London-based investor for $20 million.Privately owned Atlantis, which works with governments a
New Zealand company Atlantis Healthcare, which has operations in nine countries and aims to become a world leader in its field, has sold a 50-percent stake to a London-based investor for $20 million.
Privately owned Atlantis, which works with governments and drug companies to develop ways to get patients to adhere to their prescribed treatments, has been growing at up to 35 percent a year and wants to continue expanding.
The company needed capital, and after about seven months' negotiation sold the stake to White Cloud Capital, whose managing partner Nicholas Watkins joins the Atlantis board along with former Fisher&Paykel Healthcare chairman Gary Paykel.
The purchase was not a typical private equity play where the target was cut and slashed for sale, Atlantis founder and chief executive Michael Whittaker said. Under the agreement, White Cloud could not increase its stake.
"Although New Zealand's home and we're firmly based in New Zealand, the future for Atlantis is globally, and if we really wanted to take an opportunity in front of us in view of where the adherence business is going, we had to find an international partner that could help facilitate that," Mr Whittaker told NZPA.
Populations were getting older, governments wanted to save money, and pharmaceutical companies were being reimbursed according to patient outcomes, which made it a good time to expand.
Atlantis manages 45 patient programmes in New Zealand, Australia and the UK, and wants to expand into the Middle East, Europe and southeast Asia.
Fifty percent of patients with chronic diseases such as asthma or diabetes dropped their medication within six months, often because they felt better or believed the medication was not working, Mr Whittaker said.
In the United States, patients failing to stick with their treatments cost the healthcare system an estimated $US290 billion ($NZ394b) a year, and resulted in 125,000 deaths.
Atlantis' programmes involved intervention, for example getting a nurse to visit, or talk on the phone, or sending text messages or a relevant magazine.
The strategies relied on technology that could be scaled up to cover tens of thousands of patients, or could cater for small groups with large medicine costs.
Sales were in the tens of millions of dollars a year, and costs were a similar amount, but the company had been profitable for a number of years, Mr Whittaker said.
Atlantis, which has received some market development funding from New Zealand Trade and Enterprise, planned to set up a research institute in New Zealand, investing over $1m a year. The institute would be owned by Atlantis, as would the intellectual property.
Atlantis would have wanted a New Zealand company as a backer if they could also deliver the global network needed.
But no domestic investors would have matched the deal with White Cloud, and New Zealanders generally undervalued high growth companies, he said.
"I definitely think it is particular to New Zealand, and my personal opinion would be because we just have a lack of private equity competition, and lack of people in that market.
"You go to London and you have screeds of lists of opportunities...and quite honestly phenomenal sums of money to invest in the right investment in the right deal," Mr Whittaker said.
