US giant snaps up NZ software firm Emendo
Christchurch health services software firm Emendo has been snapped up by a United States giant for an undisclosed amount in a growing trend for foreign purchases of small technology companies in New Zealand.
The 10-year-old Emendo went to the US looking for investment capital but Fortune 500 firm McKesson Corporation wanted the whole company.
The US pharmaceutical distribution, healthcare and IT firm announced yesterday the deal to acquire the Christchurch firm that produces software called CapPlan.
The software helps hospitals forecast and manage patient activity, helping reduce costs and improve services for patients.
Technology Investment Network managing director Greg Shanahan said the deal was part of a growing trend of foreign acquisitions of New Zealand technology companies in the past two years.
Shanahan said in the software sector it could be part of an owner's business model to build the company and sell it.
New Zealand had been an early developer of health IT, therefore companies were wanting to acquire New Zealand IP to take themselves further faster rather than developing it in-house, Shanahan said.
Emendo chief executive Dave Tinkler said the value of the deal was confidential but it was a "very positive" step for the Christchurch firm.
All Emendo's staff, including Tinkler and company founders Nick Burns and Bart Visscher, would be employed by McKesson New Zealand Ltd.
Emendo has about 22 staff in Christchurch and about 30 worldwide.
Tinkler will head up McKesson New Zealand.
Emendo's CapPlan is used in more than 40 hospitals in New Zealand, Australia, Canada and Britain.
The company was founded in 2002 by Nick Burns and Bart Visscher who along with Tinkler and director Phil Holliday have extensive holdings in the company.
Product development and sales and marketing for Australasia would remain in Christchurch, Tinker said.
"While we'll obviously have some input from the States, we will be their development arm for their capacity planning solution."
Tinkler said the company was "very happy" although it had not been its original intention to sell.
Last January the company said its annual revenue was about $10 million and in the next three years it hoped to reach the $50m mark, although the latest TIN100 report estimates Emendo's annual revenue as about $4.9m.
McKesson, ranked 14th on the latest Fortune 500 list, called CapPlan "a natural extension" of its own McKesson Technology Solutions software. Fairfax NZ
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