Powerhouse MD Hampson confident of raising A$10M minimum after extending offer

Tuesday 20th September 2016

Powerhouse Ventures managing director Stephen Hampson is confident the Christchurch-based technology incubator will raise the minimum A$10 million in an initial public offering after extending the closing date by a week.

The offer opened on Aug. 17 and will now close on Sept. 23 having initially been scheduled to end on Sept. 15. Hampson said the extension was because brokers had asked for more time to "pull in the stragglers" on the retail side, while institutional investors sought some breathing space after company reporting season.

"I've been delighted by how it's gone in two ways: the level of commitment, which is superb, but also that balance in the share register of sufficient retail interest to give this spread and liquidity, but also investors in there for the long term, which is ideal for a company like ours," Hampson said. "Indications at the moment are all very good - I'm feeling quite comfortable that we'll have a successful IPO, and for me, success means beyond the minimum."

The company plans to raise up to A$20 million selling 18.7 million shares at A$1.07 apiece, representing about 49 percent of the shares on issue. The proceeds will largely go to expanding the firm's NZ$20.9 million investment portfolio across 19 early stage companies that are collectively worth NZ$133.6 million.

Powerhouse is one of three technology incubators that accesses operational funding, pre-incubation grants, and repayable loans for start-ups they co-fund through government innovation funding agency Callaghan Innovation. It sought to raise NZ$15 million as a precursor to the ASX listing but ultimately attracted NZ$5.2 million in the 2016 financial year, following on from NZ$3.6 million raised in 2015. In February it raised NZ$1.76 million in an equity crowdfunding offer.

Originally, Powerhouse had planned an NZX listing in New Zealand but decided instead to seek a sole Australian listing because of its bigger capital markets.

Hampson said most of the institutional interest was from micro-cap investors - who typically focus on small listed companies - with more based in Australia than in New Zealand.

"There's been good interest in the model all the way through," he said. "Institutional investors have been very clear with us that 'you'll fit our fund when you're at this size and this stage', which gives us a target to aspire to."

Powerhouse last week raised the maximum A$1 million through a bookbuild as part of the IPO.

BusinessDesk.co.nz

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