HgCapital invests $25m in New Zealand's Gentrack
HgCapital has agreed to invest NZ35.5 million ($25 million) in New Zealand industrial software specialist Gentrack to support an acquisition and expansion process in the UK.
The private equity firm will take an 11.4% stake in the Australia-listed company through a placement at NZ$3.72 per share. Gentrack's stock gained as much as 11% following the announcement and was trading at around NZ$3.95 as of mid-afternoon March 29. Gentrack has a market capitalization of about NZ$290 million.
The capital will be used for the NZ$74.6 million acquisition of utility customer information and billing system provider Junifer Systems. The remainder of the acquisition price will be met by share placements to members of Junifer’s executive leadership and NZ$30.2 million in debt facilities. Junifer CEO Saul Nurtman will head the enlarged company and HqCapital will take a seat on the board.
“The acquisition of Junifer delivers us the full range of product functionality from SaaS [software-as-a-service] billing for new entrant energy and water retailers, to cloud hosted and on-premise solutions for the largest utility players,” Ian Black, Gentrack’s CEO said in a statement.
The combined Gentrack and Junifer business is expected to be a market leader by number of utilities in the UK with 32 customers, supported by 130 local staff. Gentrack will drive a smart metering roll-out and also take Junifer products into other markets, targeting new entrant and small to medium-sized retailers.
Gentrack’s net profit increased 3% during the 2016 financial year to NZ$9.6 million, while revenue improved 25% to NZ$52.7 million. Junifer is forecast to achieve revenue of GBP10.8 million ($13.4 million) and EBITDA of GBP4.2 million in the 2017 calendar year.
HgCapital was founded as Mercury Private Equity and acquired by Merril Lynch in 1997 before negotiating independence under its current name in 2000. It claims to have invested in 25 “platform” software businesses and made more than 200 bolt-on acquisitions. Funds under management total GBP9 billion.
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