Gentrack acquires Junifer Systems

Gentrack Group Ltd | www.gentrack.com | info@gentrack.com | ARBN 169 195 751

28 March 2017

GENTRACK ACCELERATES GROWTH IN THE UK WITH ACQUISITION OF JUNIFER
Gentrack Group Limited (NZX/ASX: GTK) is pleased to announce that it has entered into an unconditional
agreement to acquire the UK based utility customer information and billing system provider Junifer Systems
Limited ("Junifer") for an enterprise value of NZ$74.6m (£42.0m)
1
.
Junifer is a market leading utility customer information and billing system provider for energy retailers in the
UK with 25 existing customers out of approximately 50 energy retailers in that market. Junifer's technology is
provided on a SaaS basis and offers new entrant utilities a cost effective and preconfigured solution.
The combined Gentrack and Junifer business will be the market leader by number of utilities in the UK with 32
customers, supported by 130 local staff and a full product range for energy and water utilities.
John Clifford, Gentrack Chairman said, “We are delighted to bring Junifer and Gentrack together in the UK. The
combined UK business, under the leadership of Junifer CEO Saul Nurtman, will be well positioned to continue
to provide highly innovative and low risk solutions to UK energy and water utilities, and from that strong base
to expand into new markets.”
Ian Black, Gentrack CEO 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.
The combined product offering of Gentrack Velocity and Junifer CIS is well positioned for growth, capitalising
on the growing market share of Independent energy retailers, the UK smart metering roll-out, and retail
competition in water for commercial and industrial consumers. Gentrack will also take Junifer CIS into other
geographic markets as a solution for new entrant and SME retailers."
The Junifer vendors will invest NZ$5.3m (£3.0m) in newly issued Gentrack shares. The vendors include the
three founders and another 3 key executives of Junifer who are all investing in Gentrack and will remain as part
of the management team of the combined UK business.
Junifer is forecast to achieve revenue of £10.8m and EBITDA of £4.2m in the 2017 calendar year
2
. On a Pro
Forma basis, assuming Gentrack had owned Junifer for the entire FY2017 period, it is estimated the acquisition
would be approximately 10% earnings per share accretive.
The acquisition enterprise value of NZ$74.6m (£42.0m) equates to a purchase price of NZ$78.1m
3
(£44.0m)
including cash acquired of NZ$3.5m (£2.0m). The acquisition will be funded by:
 a share placement of NZ$35.5m (£20.0m) to HgCapital at NZ$3.72 per share, a 2% premium to the 5 day
VWAP
4
;
 a share placement of NZ$5.3m (£3.0m) to Junifer vendors at NZ$3.65 per share (representing the 5 day
VWAP)
4
;
 NZ$30.2m (£17.0m) drawdown of debt facilities

1
Based on the NZD/GBP foreign exchange rate of 0.5632
2
Different to Gentrack's financial year end of 30 September 2017
3
Excluding estimated transaction costs of NZ$0.9m
4
Calculated at market close on 27 March 2017

Gentrack Group Ltd | www.gentrack.com | info@gentrack.com | ARBN 169 195 751

 NZ$8.0m (£4.5m) cash on hand.
Settlement of the placement to HgCapital is expected to complete on 30 March 2017. Settlement of the Junifer
acquisition is then expected to occur on 1 April 2017 and will be completed by a Gentrack UK subsidiary.
The Junifer vendors have agreed to a 24-month voluntary escrow arrangement which restricts them from
trading their shares before 1 April 2019. Junifer was advised by Innovation Advisors, an independent,
technology focussed, global investment bank.
HgCapital will hold approximately 11.4% of Gentrack's shares following the transaction. HgCapital is a leading
global investor in application software businesses, with £9 billion in funds under management. It has invested
in 25 “platform” software businesses and more than 200 bolt-on acquisitions over the last 20 years.
HgCapital has deep investing experience in the renewable energy, smart energy management and utility billing
software sectors. HgCapital's Senior Partner, Nic Humphries, who led the investment, will join the Gentrack
Board of Directors from 27 April 2017.
Gentrack has arranged a revolving debt facility of NZ$42.5m through ASB bank, of which $30.2m will be drawn
to fund the acquisition, and an undrawn NZ$5.0m working capital facility.

Conference Call
Gentrack Group Limited (NZX/ASX: GTK) invites investors to a conference call on 29th March at 11:00am NZT /
9:00am AEDT to discuss this acquisition.
The audio recording from the conference call will be made available on the Gentrack Investor Centre after the
call.
The conference call details are:
Participant code: 594 077 21#
NZ 0800 480 361
Australia Toll free 1800 045 913
Australia Direct 02 8023 8415
Hong Kong Direct 3011 4660
Singapore Direct 66221295
UK Toll free 0800 085 5072
UK Direct 0203 027 1109
US Toll free 1 877 605 3379
US Direct 1 212 444 0512
Other: http://www.btconferencing.com/globalaccess/?bid=759_automated


Contact
Ian Black, CEO
David Ingram, CFO
+64 9 966 6090

Gentrack Group Ltd | www.gentrack.com | info@gentrack.com | ARBN 169 195 751

About Gentrack
Gentrack is a developer of specialist software for energy utilities, water companies and airports around the
world. It employs over 280 people in offices in New Zealand, Australia and the UK and services utility and
airport sites across four continents.
Gentrack is comprised of two leading software products - Gentrack Velocity and Airport 20/20. Gentrack
Velocity is a specialist billing and CRM product designed for energy utilities and water companies in
competitive and regulated utility markets. Airport 20/20 is a comprehensive Airport Operational System
engineered to optimise an airport’s operations through intelligent collaboration, streamlining airport
information flows and transforming the passenger experience.

About Junifer
Junifer Systems is a leading UK provider of Customer Information and Billing systems to the utilities industries.
Junifer’s first systems went live within an energy supplier in 2012, and to date, Junifer has over 25 utility
customers around the globe, all using the Junifer CIS to service and manage their diverse and growing customer
bases.
Junifer is designed with the smart multi utility in mind – where utilities converge to provide a seamless ‘one bill’
solution. Completely flexible and scalable, Junifer can manage all meter and fuel types, from domestic and
small business through to large industrial and commercial in one system, including district heating and water.

---

www.gentrack.com
G E N T R A C KG R O U P LT D ( G T K )
A C Q U I S I T I O N O F J U N I F E R
28 MARCH 2017

IMPORTANT NOTICE
This announcement contains forward-looking statements. All forward looking statements reflect views only as at the date of this announcement, and should not
be taken to be forecasts or predictions that those events will occur. Forward-looking statements often include words such as “may”, “could”, “estimates”,
“anticipate", "expect", "plan” or other similar words in connection with discussions of future operating or financial performance. Similarly statements that describe
the objectives, plans, goals or expectations of Gentrack Group Limited (“GTK”) or any of its wholly-owned subsidiaries (togetherwith GTK the “Gentrack Group”)
may be forward looking statements.
Forward-looking statements are opinion only and are based on management's and directors’ current expectations and assumptions regarding Gentrack’s
business and performance, the economy and other future conditions, circumstances and results. As with any projection or forecast, forward-looking statements
are subject to inherent risks and uncertainties, including changes in circumstances. Gentrack’sactual results may vary materially from those expressed or
implied in its forward-looking statements and deviations are both normal and to be expected. None of Gentrack, any member of theGentrack Group or their
respective directors, officers, employees or advisers or any other person referred to in this announcement, make any representation or warranty (express or
implied) as to the accuracy or likelihood of fulfilment of any forward looking statement or assumption, or any events or resultsexpressed or implied in any
forward looking statements.
In this presentation, a reference to “Gentrack” is to GTK or, where the context requires, the Gentrack Group.
2

T R A N S A C T I O N O V E R V I E W _
•Gentrack has entered an unconditional agreement to acquire Junifer Systems Ltd("Junifer")for an Enterprise Value of NZ$74.6m (£42.0m)
•Junifer is a market leading utility Customer Information and Billing system provider for energy retailers in the UK with 25 existing customers
•Combined with Gentrack, the Group will be a market leader for billing and customer management for energy and water utilities in the UK
•The management of Junifer will join the Gentrack UK management team to lead the combined business in the UK
•The acquisition is to be funded via:
–NZ$35.5m (£20m) placement to HgCapital(a leading investor in application software businesses) at NZ$3.72 per share
–NZ$5.3m (£3m) placement to Junifer vendors (who are ongoing managers) at NZ$3.65 per share
–Remainder to be funded via new bank debt and cash
•Gentrack expects the acquisition to be accretive in FY2017 and to drive increased growth in earnings in FY2018 and beyond
•Settlement is expected to occur on 1 April 2017
3

O V E R V I E W O F J U N I F E R S Y S T E M S _
•Market leading provider of customer information and billing software to utilities in the UK
•Since going live with its first energy supplier in 2012, Junifer has grown its customer base to 25 utility customers
•Junifer'stechnology provides new independent utilities with a cost effective, pre-configured SAAS solution to support market entry
–End-to-end lifecycle product management software: integrated customer on-boarding, registration, billing and collection processing
–Multi-utility capabilities covering energy (electricity and gas), water and telecommunications
–Product designed for residential, SME and commercial and industrial customers
•The three founders and three key executives of Junifer are all investing in Gentrack and will remain as part of the management team for
the combined UK business
4

J U N I F E R U T I L I T Y L I F E-C Y C L E M A N A G E M E N T
S O L U T I O N _
5

S T R A T E G I C R A T I O N A L E _
•This acquisition positions Gentrack as a leader in the UK for utility billing and customer information systems
–Junifer has grown rapidly to establish itself as a leading solution for start up utilities in the UK
–Combined with Gentrack, theGroup has 32 out of 50 energy utilities in the UK -predominantly outside the "Big 6" large incumbent
retailers
•Immediately delivers Gentrack a 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 utilities
•the combined product offering of Gentrack Velocity and Junifer CIS is well positioned for the continuing growth of Independent energy
retailers, smart metering and new utility business models,and the introduction of retail competition for commercial and industrial
water consumers
•Independent retailers in the UK are expected to grow theirmarket share from c.15% currently to c.30% by 2020
1
•Junifer has a largely SAAS model with 55% recurring revenue
•Gentrackwill takeJunifer CIS into other markets as a cost effective preconfigured solution for new entrant and SME retailers
–Junifer CIS has already been adapted for the New Zealand market
Notes
1.Source: Ofgem (UK regulator), Citi group and Cornwall Consulting
6

F I N A N C I A L I M P A C T _
•Junifer is forecast to achieve revenue of £10.8m and EBITDA of £4.2m in the 2017 calendar year
1
•Junifer will contribute approximately six months earnings to Gentrack in FY2017
–acquisition settlement is expected to occur on 1 April 2017
•Gentrack expects the acquisition to be earnings per share accretive in FY2017, and to drive increased growth in earnings in FY2018 and
beyond
•On a Pro Forma basis, assuming Gentrack had owned Junifer for the entire FY2017 period, it estimates the acquisition would be
approximately 10% earnings per share accretive
•Gentrack (excluding Junifer) re-iterates its long term guidance of 10%+ revenue and EBITDA growth, albeit results may be impacted by the
timing of projects
Notes
1.Different to Gentrack’sfinancial year end of 30 September 2017
7

T R A N S A C T I O N F I N A N C I N G _
•Enterprise value of NZ$74.6m (£42.0m) represents 10x EV / CY2017 EBITDA
2
•The Junifer acquisition will be funded by:
–a placement of NZ$35.5m to HgCapitalat NZ$3.72 per share (2% premium
to the 5-day VWAP
3
) which will equate to 11.4% of Gentrack shares
following the transaction
–a placement of NZ$5.3m to Junifer vendors at NZ$3.65 per share (the 5-
day VWAP
3
)
–NZ$30.2m drawdown of debt facilities
–NZ$8.0m cash
•Gentrackhas arranged a debt facility of NZ$42.5m through ASB bank and a
NZ$5m working capital facility
–the NZ$30.2m of debt will be drawn in GBP (£17m) to form a natural
hedge against increased UK assets and earnings
Enterprise value£42.0m / NZ$74.6m
Purchase price
4
£44.0m / NZ$78.1m
Sources
Placement to HgCapital(£20m)NZ$35.5m
Junifervendors (£3m)NZ$5.3m
Newdebt (£17m)NZ$30.2m
Cash (£4.5m)NZ$8.0m
TotalNZ$79.0m
Uses
Enterprise value(£42m)NZ$74.6m
Cash acquired (£2m)NZ$3.5m
Transaction costs (estimated)NZ$0.9m
TotalNZ$79.0m
Notes
1. Based on the NZD/GBP foreign exchange rate of 0.5632
2. Different to Gentrack’s financial year end of 30 September 2017
3. 5-day VWAP calculated at Monday 27 March
4. Excluding estimated transaction costs of NZ$0.9m
8

O V E R V I E W O F HgC A P I T A L_
•HgCapitalis a leading global investor in application software businesses, with c. £9bn in fundsunder management
•It has invested in more than 25 "platform" software businesses and more than 200 "bolt-on" acquisitions over the last 20 years
•It has deep investment expertise in renewable energy, smart energy management and utility billing software
•HgCapital’sSenior Partner,NicHumphries, led the investment and will join the Gentrack Board from27 April 2017
9

T I M E T A B L E _
Announcement28 March 2017
HgCapital placement settlement30 March 2017
Junifer vendor placement settlement1 April 2017
Junifer acquisition settlement1 April 2017
•The Junifer vendors have agreed to a 24-month voluntary escrow arrangement which restricts them from trading their shares before1
April 2019
10