Despite the checkered past, a fund manager close to the deal says the firm has plenty of strong attributes including an enviable growth profile and few competitors.
“It has a large global addressable market, high re-occurring revenue, market expansion, and technology competence,” the source said.
In particular, its recent acquisition of software firm Ringtail has turned the company into a one-stop shop for customers looking for data processing, analytics and review, setting it apart from competitors, the industry source said.
Lennox Capital Partners, which is a cornerstone investors in the IP, says Nuix’s competitors don’t have the same “best in class” software that allows, for example, lawyers and police to better organise documents and data.
“You don’t have another company that offers all those software services,” said Olivia Salmon, a Lennox partners analyst who advised the team on the investment. “In the Australian listed market you rarely get a pure software company that is best in class.”
The Lennox fund manager overseeing the investment, Liam Donohue, says he’s hopeful the stock will do well in the after-market in the first few days but he’s more interested in the medium to long term, pointing out the growth profile on the stock is promising.
“If it continues to perform well, it could be a poster child for tech sector,” said Mr Donohue.
Existing shareholders of Nuix have sold down $875 million worth of stock at the IPO price, and the company has raised another $100 million of new capital for the business to invest in growing into new verticals.
The listing signifies a major pay day for Nuixs majority owner, Macquarie. It will bank about $566 million from the float and retain 30 per cent worth about $508 million.
Melbourne business identities Alan and Carol Schwartz were early backers of Nuix and are expected to sell about $48 million worth of shares in the float, while still retaining a position.
As well as the ongoing legal battle with its former CEO, Nuixs history also involves its co-founder and former chairman Tony Castagna being found guilty and sentenced to seven years in jail for offshore tax fraud before having his conviction overturned after hed already spent 14 months in jail.

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