Orion Health shares jump 18% after confirming talks for 'significant transactions'
By Paul McBeth
April 6 (BusinessDesk) - Orion Health Group shares jumped 18 percent after media speculation of a trade sale spurred the
health software developer to confirm it was pursuing "potentially significant transactions".
The stock climbed 11 cents to 71 cents after the National Business Review reported the Auckland-based company was close
to a trade sale, citing an unnamed source. Orion Health has been reviewing its capital structure over the past year and
has settled on a major overhaul of its operations, and while it today acknowledged media speculation about the strategic
review and today's NBR report, it said nothing has been finalised.
"Orion Health has, over some months, been progressing potentially significant transactions for the business. However, as
with all incomplete transactions, there is no certainty that any transaction will result, or the terms of any such
transactions that might transpire," the company said in a statement. "Therefore, no further information will be provided
unless and until a proposal reaches sufficient certainty."
The shares sank as low as 57 cents this week after the software developer missed annual revenue guidance, citing delayed
contracts for pushing those sales into the next financial year.
At the same time as the profit warning, Orion Health announced plans to save as much as $30 million a year from an
operational restructure, having already trimmed $10 million of annual costs when it shrank its workforce to 1,050 from
1,200.
Orion Health went public in late 2014 to much fanfare, attracting a $915 million valuation in the initial public
offering which sold at $5.70 apiece. The software company had been profitable but chose to forgo earnings in the
short-term to build a globally significant business. However, it has struggled to meet optimistic expectations, and is
valued at just $139.2 million at its current market price.
(BusinessDesk)