Orion Health mulls going public
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New Zealand’s largest private software exporter Orion Health is “strongly considering” a public listing, says its managing director and majority owner Ian McCrae.
At the opening of the company’s new headquarters in Auckland last week McCrae told Computerworld that the board has been contemplating going public for the last three years. “Once you get larger, listing becomes more and more sensible.”
In the last financial year Orion posted the largest revenue in the company’s 19 year history, almost $100 million according to its annual report. The company says its current rate of growth could see it turn over $1 billion annually by 2020. McCrae says 95 percent of the company’s present revenue is derived from exports.
Chairman Andrew Clements says a listing could take place in the next four years. “All we know is it’s not at the moment. Next year would be the earliest it could be and there’s an awful lot of stuff that we need to do. One of the big things is this acquisition of Amalga HIS software from Microsoft (in February) in Thailand, we’re still bedding that down.”
He says Orion Health is committed to staying in New Zealand and “if we do a listing it will be in New Zealand, but it’s got to be at a time when its right for the company.”
NZX director and Xero founder Rod Drury says Orion Health is an obvious contender to joining the burgeoning “tech sector” of locally listed companies that includes Xero, TradeMe and Diligent.
Drury is an advocate for public listings and says the only downside is the sometimes unwelcome attention they can bring.
“At a personal level you certainly get some stones thrown but that’s just part of the game. From a business level it’s been fantastic.”
“We’ve been able to raise the capital we want and it hasn’t limited our options in any way since we’ve listed, which at the beginning of the journey was $15 million and we’ve [now] raised a total of $85 million.”
The next step for Xero is a secondary listing on the Australian Stock Exchange, scheduled for next month, where the company would be subject to ASX rules but remain a New Zealand company. “At the moment a large number of our customers and especially our accounting partners, would love to buy into the Xero story but it’s difficult for them to do it.
“There are all sorts of hoops for them to invest in a New Zealand listed company but if we dual list it, it’s very easy.
“So we’re not looking at raising more capital, it’s just a straight secondary listing and ... it means we start getting covered in Australian media which is great for building our brand.”
Drury says the company is not ruling out a Nasdaq listing in the future.
“I’m not saying we’re doing that but certainly as part of the strategy you start thinking about this. If we’re ultimately going be a global brand then you’d probably look to list in the Nasdaq market.”
Orion Health’s holding company Orion Systems International is currently involved a legal dispute that involves Healthlink, which another Orion entity — Orion Corporation — has a 52.43 percent stake in. The matter is being dealt with at the Auckland High Court. Parties in the matter would not comment to Computerworld. But McCrae did say: “That’s one of those shareholding things, we’re in mediation at the moment and I’m sure one day we’ll sort it all out.”