Gentrack agrees to buy UK's Junifer Systems for about $79M, extending utility software reach

Wednesday 29th March 2017

Gentrack Group has agreed to acquire the UK's Junifer Systems for about $79 million, extending its reach in customer information and billing systems for utilities such as energy retailers.

The acquisition will be funded through a mix of shares, cash and debt facilities, the Auckland-based utilities software developer said in a statement. Buying Junifer will make Gentrack the UK's largest provider of customer information and billing system provider for energy retailers, with 32 customers in a market of about 50 energy retailers, it said.

“The acquisition of Junifer delivers us the full range of product functionality from SaaS billing for new entrant energy and water retailers, to cloud hosted and on-premise solutions for the largest utility players," said Gentrack chief executive Ian Black. "Gentrack will also take Junifer CIS into other geographic markets as a solution for new entrant and SME retailers."

To finance the deal, Gentrack will make a placement of shares at $3.72 to HgCapital, raising $35.5 million. It will also make a placement to Junifer's vendors at $3.65, raising $5.3 million and draw down $30.2 million, it said. The balance would use $8 million of cash at hand.

Settlement of the HgCapital placement is expected on March 30, allowing the deal to be completed on April 1, it said. Gentrack shares last traded at $3.70 and have gained 49 percent in the past 12 months.

The Junifer vendors have agreed to a 24-month voluntary escrow arrangement preventing them from trading in the stock before April 1, 2019.

After the capital raising, HgCapital will own about 11.4 percent of Gentrack. HgCapital, which Gentrack described as a leading global investor in application software businesses, will also gain a seat on Gentrack's board, with partner Nic Humphries becoming a director on April 27, it said.

Gentrack also said it has obtained a revolving debt facility of $42.5m with ASB Bank of which $30.2 million will be drawn to fund the acquisition, and an undrawn NZ$5 million working capital facility.

Last month Gentrack said it expects first-half sales to rise about 20 percent as the company benefits from new projects coming on stream.

The utilities software developer told shareholders at their annual meeting that first-half sales would be about a fifth higher than the $18.5 million it reported in 2016, "with multiple projects going live" and offsetting "currency headwinds".

The company also affirmed its long-term guidance for revenue and ebitda growth in excess of 10 percent, subject to the timing of some projects.

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