Powerhouse seeks up to $A20m in ASX listing to fund new investments

Powerhouse Ventures, the Christchurch-based technology incubator, plans to raise up to $A20 million in an initial public offering on the Australian Securities Exchange to expand its portfolio of investments, including branching out across the Tasman.

The incubator will sell shares at $A1.07 apiece in an offer that opens on August 17, raising $A10-20 million and valuing the company between $A30.8-40.8 million, according to its prospectus lodged with the Australian Securities and Investment Commission. The bulk of the funds raised will go to expanding its $NZ20.9 million investment portfolio spread across 19 different early stage companies collectively valued at $NZ133.6 million.

"We propose to enter the Australian market at a time when governments are determined to ensure university research funding generates commercial outcomes," chairman Kerry McDonald said in a statement. "Powerhouse intends to be a central part of this environment with its excellent university engagement model, business building expertise, capital and networks."

Powerhouse is one of three technology incubators which 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

The company didn't provide forecasts, saying it was "currently in the growth phase any prospective financial information would contain a broad range of potential outcomes and possibilities such that the directors have concluded Powerhouse Ventures Ltd cannot include prospective financial information in this prospectus."

Powerhouse reported a profit of $NZ2.7 million on income of $NZ7.5 million in the nine months ended March 31. That included a $NZ5.8 million increase in the fair value of its investment portfolio.

Of the funds raised, Powerhouse will spend $A5.8 million on new investments if the minimum amount of capital is raised, rising to $A15.3 million if the maximum is achieved. Some $A3 million will go to operating costs irrespective of how much is raised, and between $A1.2 million and $A1.7 million will pay offer costs.

The offer is expected to close on September 15 with the shares listing on September 28.

(BusinessDesk)

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