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Orion Health confirms $120m to $150m IPO

Founder and CEO will sell up to $5 million of shares in the float.

Fiona Rotherham
Tue, 21 Oct 2014

Orion Health Group, a global provider of healthcare software solutions, has confirmed it will raise between $120 million to $150 million in an initial public offer.

Along with raising new capital to fund its attack on the US market, an entity associated with chief executive and founder Ian McCrae will sell up to $5 million of shares in the float (Mr McCrae, recently added to the NBR Rich List, owns 58% of the company).

It is expected that a prospectus and investment statement will be available later this month with the shares to be quoted on the NZX main board and ASX in late November.

It's understood broker reports issued earlier this month had a wide ranging valuation on the company from between $550 million to $900 million though most analysts are picking the valuation will end up around the $800 million mark.

A bookbuild process will be held in early November where fund managers and institutions will state what shares they want and for what price. Deutsche Craigs and First NZ Capital have been appointed lead managers for the offer. There is expected to be strong demand for the IPO which has been talked about for the past two years.

The new capital will be used to accelerate the company’s research and development capacity for new opportunities in the management of patient healthcare, improve the implementation and delivery capability, and provide additional financial liquidity.

Orion Health was founded in 1993 by McCrae who remains the majority shareholder and chief executive. Its cloud-based products and solutions are used by clinicians in more than 30 counties for patient data exchange and to improve co-ordination of their care.

The company is split into three groups: Intelligent Integration which is the original part of the business and allows different IT systems within hospitals to talk to each other; Smarter Hospitals which collects all the information on patients into one portal and allows them to be looked after from administration to discharge from hospital; and Healthy Populations which links all health providers in one area and allows patients access to their own health records.

Most revenue in future is expected to come from the healthy populations group with a drive worldwide, and particularly in the US under Obamacare, to reduce spiralling health costs while improving the level of patient care from birth to death and prevent them needing expensive hospital treatment.

Revenue has grown to $153 million in the year ended March 31, 2014 and though Orion Health has been profitable in the past, it’s not currently while it reinvests most of its healthy cashflow back into expansion globally. Most of that has gone into new hires with total staff numbers now at 1,100 worldwide. It has achieved high growth rates ranging between 25 percent and 30 percent for many years and has a revised target of hitting $1 billion revenue by 2020. Some 90 percent of revenue is derived offshore.


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Fiona Rotherham
Tue, 21 Oct 2014
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Orion Health confirms $120m to $150m IPO