NewsBite

Bridget Carter

Telstra, Seven West to fire up HealthEngine float

Bridget Carter
Picture: Richard Walker
Picture: Richard Walker

The Telstra and Seven West Media-backed online health directory HealthEngine is believed to be launching an initial public offering as healthcare groups remain in high demand at a time of low interest rates.

Adastra Corporate Advisory, a firm comprising investment bankers who previously worked at Investec, is advising on the float.

The Perth-based business, which provides bookings for over 70,000 medical practitioners, was founded by Dr Marcus Tan and Adam Yap. Other owners include US venture capital firm Sequoia.

Estimated to be worth about $100m, the company describes itself as Australia’s largest online health directory.

Its Open Appointments lets patients to make bookings on its mobile app around the clock.

It has been used for more than 47 million appointments by at least nine million Australians.

HealthEngine has faced its share of controversy, facing scrutiny from the Australian Competition & Consumer Commission.

The competition watchdog launched proceedings against the group for allegedly misleading and deceptive conduct relating to the sharing of consumer information with insurance brokers for a fee without consent and for not publishing and editing negative patient reviews between 2015 and 2018.

As a result, the Federal Court last year ordered it to pay $2.9m in penalties.

The business is heading to the boards at a time that the healthcare sector, which generates well over $100bn of revenue in Australia, remains in strong demand due to its high earnings growth profile.

Telstra has been focused on growing eHealth businesses.

The Australian listed telecommunications group is also said to be closing in on Affinity Equity Partners’ Medical Director business, which is currently up for sale through Jefferies.

It will be interesting to see how well received it is by investors, especially after the Crescent Capital’s pathology business, Australian Clinical Labs, pulled off a disappointing IPO debut after pricing at $4 per share.

The company’s share price was trading as low as $3.72 on Tuesday.

Sources say that an institutional investor sold down a major parcel of stock shortly after the listing, and the excess supply of shares dampened the price.

Yet much of the underwhelming performance, according to sources, reflects the overall weakening demand for IPOs across the board right now after a large number of companies have headed to the market in the past six months.

Major floats scheduled for the second half of this year include Judo Bank, CIMIC and Apollo’s services business Ventia, and Boost Juice owner Retail Zoo, which is owned by Bain Capital.

Read related topics:Seven West Media Telstra
Bridget Carter
Bridget CarterDataRoom Editor

Bridget Carter has worked as a writer and editor for The Australian’s DataRoom column since it was launched in 2013, focusing on capital markets, mergers and acquisitions, private equity and investment banking. She has been a journalist for more than 18 years, covering a broad range of events and topics, including high profile court cases and crimes, natural disasters, social issues and company news.

Add your comment to this story

To join the conversation, please Don't have an account? Register

Join the conversation, you are commenting as Logout

Original URL: https://www.theaustralian.com.au/business/dataroom/telstra-seven-west-to-fire-up-healthengine-float/news-story/edf1d4e7f48c9de97bba2ec17e20bf22