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PointClickCare, which is used by more than 15,000 North American facilities keeping records on 1.2 million active residents, surpassed $200-million in revenue in its fiscal year ended last Oct. 31.

Nearly a year after delaying plans to go public, the CEO of one of Canada's top private software firms, PointClickCare Technologies Inc., says there is "zero" chance his firm will do so in 2018 – but added that could rise to a "50-50" chance in the following two years.

Those aren't arbitrary numbers coming from Mike Wessinger, co-founder and CEO of the 18-year-old Mississauga firm that sells cloud-based electronic health-care-records software to nursing homes, retirement facilities and other eldercare providers. There are two big reasons to rule out an IPO this year, and they happen to be the same ones that pushed the company to abandon its plans one year ago and instead raise $85-million (U.S.) in private financing from San Francisco's Dragoneer Investment Group.

For one, uncertainty over the future of former U.S. president Barack Obama's Affordable Care Act, and what any changes could mean for his business, would remain a huge distraction for public markets investors if PointClickCare were to go out in the near term. "Certainly while there's a lot of discussion around the Affordable Care Act I don't think it's a productive market to try and go get public," he said during an interview at the company's headquarters near Toronto Pearson International Airport last week. "We could predict exactly what [an IPO] road show would look like: at least 28 minutes talking about Donald Trump, the Affordable Care Act and what-if scenarios … I don't want to spend 28 minutes talking about what-if scenarios."

Meanwhile, there is abundant capital available at attractive terms from private-equity investors who aren't as spooked by the short-term shifts the demise of Obamacare could have. "The reality is, if we needed to raise capital in that environment, why not find a single or two investors that can really take the time to truly understand the story instead of trying to continually explain that story every time there's another announcement on the ACA?" Mr. Wessinger said. "That was an easy decision."

Not only did Dragoneer buy in early last year – with about half of the money going to the company and the balance going to employees and early investors – but it followed up by purchasing roughly $80-million (U.S.) worth of additional shares from existing shareholders in late 2017, primarily earlier U.S. private-equity backer JMI Equity. That transaction, which valued the company at north of $1-billion, according to sources close to PointClickCare, hasn't been reported until now.

Staying private may be a bummer for underwriters – the firm was asked to give up its presentation spot at this month's high-profile J.P. Morgan Healthcare Conference in San Francisco to companies more likely to go public soon – but the company is continuing to thrive and has no pressing financing needs.

"We're going to raise money when the need arises," either to give one of its investors liquidity or to do a large acquisition, Mr. Wessinger said. He figures JMI, which invested $50-million in 2011 and sold about a third of its stake in the fall secondary offering, is likely to sell down the balance of its stake within the next two years, given the finite life of typical private-equity funds. "Depending on the market, if it's pretty compelling and public trades are going at significantly higher than private trade deals, then they'll entertain [an IPO]," Mr. Wessinger said. But if there is still a parade of private-equity investors knocking on PointClickCare's door, as is now the case, a private sale would be likelier.

Hence the 50-50 odds, though Mr. Wessinger's guess is "it would probably be a process run with other private equity companies" leading to a private deal.

Matt Emery, a general partner with JMI and PointClickCare director said his investment firm plans to remain shareholders "for a number of years" but declined to specify any time horizon or confirm any details about JMI's share sale last fall. He said companies such as PointClickCare used to have two options – to go public or to find a strategic industry buyer – but the preponderance of flush private equity buyers now offers growing companies a third option – to cash out some of their holdings while continuing to lead the growth and direction of the company backed by patient outside investors. He added PointClickCare "could still be an IPO company for sure down the road. But in the near term I think it is not a focus."

PointClickCare, which is used by more than 15,000 North American facilities keeping records on 1.2 million active residents, surpassed $200-million in revenue in its fiscal year ended last Oct. 31 and its top line is growing by around 25 per cent a year.

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