Former technology star Orion Health has agreed to sell what one analyst has described as the "crown jewels" of the businesses in a $207 million deal aimed at extricating itself from its financial woes.
NZX-listed Orion will effectively sell a 75 per cent stake in its core Rhapsody division – which helps healthcare providers pull together patient data from different sources – to British investment company Hg for $187 million, through a transaction that will take place in two stages.
Hg will also buy a quarter share in Orion's population health business for $20m.
Orion said the deal valued the overall Orion business at $255m and it would use most of the proceeds from the transaction for a share buy-back.
Orion shares jumped by a third to $1.18 following the announcement of the deal, but remain well down on the price of $5.70 a share that investors paid for them when the business listed on the NZX amid high expectations in 2014.
Craigs Investment Partners analyst Steven Ridgewell had forecast a similar deal to the one that has been announced in May, but said then that his preference would be for Orion to hold on to the profitable Rhapsody division and wind down the rest of the business.