Orion shareholders to vote on Rhapsody sale this month

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eHealthNews.nz editor Rebecca McBeth

Orion shareholders will vote on plans to sell the company’s Rhapsody division to Hg at an annual shareholders’ meeting later this month.

The Notice of Meeting for the company’s annual shareholders’ meeting details Orion’s plans to split up the business, selling Rhapsody and 25 per cent of its population health management business for $225 million.

Orion will maintain full control of its hospitals division and has recently announced a new version of its hospital information system, Enterprise.

Rhapsody is Orion Health’s integration engine and is an integral part of the company’s suite of applications used by health providers across New Zealand.

The company previously told eHealthNews.nz that the sale will have no impact on its customers’ day-to-day relationship with the Orion Health team.

“The Hg transaction enables Orion Health to benefit from Hg’s funding and technology expertise while ensuring that each of Orion Health’s three separate businesses is set up to capitalise on its full potential,” chair Andrew Ferrier’s letter to shareholders says.

Following the transaction, Orion will undertake a share buyback offer at an estimated price of $1.16–$1.26, lower than the $1.24–$1.29 per share estimated when the deal was announced in July.

“With the benefit of a further two months since the original announcement of a higher estimated buyback offer price range, the directors have been able to further analyse the impact of the variables that could affect the level of cash available for the share buyback at the time it is able to be made,” the letter says.

“In particular, the period required to satisfy the various conditions to the Hg transaction, and hence to close the Hg transaction, is uncertain, and therefore the timing of the share buyback could be delayed.”

Ferrier and director Paul Shearer will resign as directors of Orion Health once the buyback is completed and new directors are identified to lead the company “through its next phase”.

Orion Health’s 3023 shareholders will have the opportunity to vote on the plan at a meeting on 28 September 2018.

If they vote yes and Hg gets Overseas Investment Office approval for the purchase, the sale is expected to be completed in late October.

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