Big payday coming for Harbour on top of FirstCape merger

Today is an exceptionally big one for Harbour Asset Management because not only will it become part of a four-way merger to form FirstCape but one of its investments looks likely to deliver a big payday.

Friday, December 15th 2023, 6:34AM

by Jenny Ruth

Harbour owns 15% of ASX-listed but Wellington-based Volpara Health, which uses software to detect breast cancer early, and South Korea-listed cancer detection company Lunit Inc has launched a takeover offer for Volpara valuing its equity at A$295.7 million.

Lunit will offer A$1.15 per share for Volpara under a scheme of arrangement which its board says is “the most compelling value for shareholders in the absence of a superior proposal” and that it follows a thorough assessment of different strategic options.

Volpara shareholders are exepected to vote of the scheme early in the second quarter of 2024 and the board is unanimously recommending that they accept, conditional on the price offered being within or above an independent adviser's valuation.

Volpara shares closed on Wednesday at 77.5 Australian cents and the offer price represents a 47.4% premium.

The offer price is also a 55.4% premium to Volpara's one-month, volume-weighted share price of 74 cents.

“The transaction positions Volpara to explore new opportunities in global markets and provides a broader portfolio of products to sell in Volpara's largest market, the US,” the company says.

It will accelerate Volpara's ability to “serve its purpose of saving families from cancer,” it says.

“With the support of Lunit's in-house radiologists and complementary technologies, Volpara's respository of more than 100 million images will be strategically augmented by additional artificial intelligence (AI) expertise and solutions.”

The price offered, which implies an enterprise value of A$285.5 million, is at 7.5 times Volpara's full-year 2024 revenue.

Volpara's revenue in the six months ended Sept 30 rose 17% to NZ$19.8 million and it reported a bottom-line loss of $1.4 million, down from the previous first-half loss of $4.2 million.

Cornerstone shareholders controlling 25.9% of Volpapa, including Harbour, non-executive director and venture capitalist Roger Allen and Volpara founder Ralph Highnam, have undertaken to vote in favour of the scheme.

Tags: Harbour Asset Management