Sunday, 20 Jun 2021

Yet another tech firm sold offshore for $100m-plus, but ezyVet founder promises hundreds of new jobs

Tech company ezyVet – the Auckland maker of software for veterinary practices and hospitals – has been bought by Nasdaq-listed IDEXX Laboratories.

Founder, CEO and sole shareholder Hadleigh Bognuda would not put a price on the deal, but it was subject to Overseas Investment Office approval – meaning it was somewhere north of the agency’s $100 million threshold. The Herald understands it was closer to Vend’s recent $455m sale than Timely’s, which is thought to be near the OIO’s $100m minimal approval mark.

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This year has seen a string of local tech companies being sold offshore, with Auckland point-of-sale software maker Vend being sold to Canada’s Lightspeed for US$350m ($455m), Dunedin appointment booking software firm Timely sold to Silverlake-backed US company Evercommerce for $100m+, Kumeu mobile game developer Ninja Kiwi sold to Sweden’s MTG for $203m and Christchurch geologic 3D modelling outfit Seequent acquired by Nasdaq-listed Bentley Systems for $1.45 billion.

While the trend has caused concern in some quarters, a buoyant Bognuda told the Herald the sales should be celebrated.

“It’s great news for New Zealand, and tech talent.”

In the immediate case of his company, it would accelerate already ambitious hiring plans.

Today, ezyVet and satellite company Vet Radar (a maker of workflow software for veterinary hospitals, which is also part of the IDEXX sale) employ 200 staff – 130 in Auckland and the balance in the US and UK.

Bognuda had been planning to boost that to 500 by 2024.

With deep-pocked IDEXX now behind him (the US firm has market cap of US$47 billion), he anticipates expanding his hiring drive to hit 800 or 900 staff by mid-decade.

“We’ll have more Kiwis building more software and creating more wealth and paying more tax,” he said.

Each sale, “creates a new general of angel investors and mentors,” he added.

Investors who benefitted from the Trade Me sale had poured money into startups like Vend and Timely, while he himself had used funds from two previous exits – Vibe and ThinkConcepts – to bankroll ezyVet.

His company has just completed a new building in Freeman’s Bay that can accommodate 350. ezyVet has is trying to employ 40 more staff immediately, though Bognuda says the tech skills shortage and closed borders mean recruitment is challenging in the near term.

Bognuda said ezyVet was founded in 2007, but spent its first six years on product development. It was not until 2013 that it started to get a foothold in the market.

Today, ezyVet holds around 50 per cent of the local veterinary market, but Bognuda says NZ sales only account for around 2 per cent of the company’s annual revenue. It has always had a strong focus on the US market, and today has around 2200 customers worldwide, making the global market leader in its niche

IDEXX, which makes a range of software and diagnostics for the vetinary market, has around 10,000 customers and will help ezyVet extend its reach further.

The US giant, which has doubled its market value to US$47during the pandemic – which has seen a boom in pet-buying – as its shares have climbed from US$183.29 in March 2020 to a recent US$550.61.

Bognuda said the sale was unusual in that there no VCs or private equity involved. ezyVet had been profitable for years, allowing it to grow organically, and for the Wairapa College old-boy to retain 100 per cent control.

When IDEXX approached him, it was just the latest in a string of offers to buy ezyVet. Like other trade sale offers, the price and terms were more attractive than a private equity deal.

Beyond his hiring drive, Bognuda said he will now weigh potential investments in local startups.

“But first I’m going to get some sleep.”

Source: Read Full Article

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