Dental software company welcomes unnamed suitor

May 04 2007 - National Business Review

The overseas company doing due diligence on Software of Excellence has similar aspirations as the New Zealand-based dental software developer, according to chief executive Brian Weatherly.

Shares in Software of Excellence sky-rocketed this week to $2.75, the highest in more than three years, after the company announced a health IT-related business expressed an interest in the company.

The business has been given about 20 days to place an offer on the table.

The unnamed company is a multinational “somewhat larger” than Software of Excellence and seems to be making a “credible” offer given its interest in dental software Mr Weatherly told NBR from London this week.

Software of Excellence, which generates about 90% of its revenue in the UK, is the biggest developer of dental software in Australasia.

“[The interested party] operates in the same sector… one of our key strategic goals is to venture into [continental] Europe. They are of a similar mind,” Mr Weatherly said.

“They’ve clearly got sales and marketing synergies that relate to our company."

Mr Weatherly, who relocated to the UK last year, told NBR in March that Software of Excellence was looking to bring synergies to its existing business and had identified a lot of opportunities in Europe.

Should the interested party choose not to proceed with a takeover, Software of Excellence will push ahead with its plan to expand into continental Europe, which could involve listing on the London Stock Exchange’s Alternative Investment Market (AIM).

“We’ve got a great go-forward strategic plan.”

Mr Weatherly said he had no plans to extend the deadline set for the unnamed company.

“Having this is in play creates uncertainty for our staff – hence the reason to really create pressure on the party to complete due diligence.”

An analyst and investor road show scheduled for next week has been put on hold until the unnamed company’s intentions have been revealed.

If the interested party decides to proceed with a takeover offer, the fate of Software of Excellence may be determined by Sydney-based private equity house Co-Investor Capital, which owns about 18% of the company.

Co-Investor Capital managing director Roger Sharp declined to comment on whether the Sydney-based company supported or opposed any takeover of Software of Excellence.