A Natural Convergence

Six years ago, when several major Wall Street firms invested a quarter of a billion dollars into Honolulu-based Internet data exchange firm Pihana Pacific, local venture capitalists called it a huge gamble. After all, International data exchange is a complicated, risky business. These days, however, investors are showing restored faith (albeit, to the slightly less inflated tune of $8 million) in a few former Pihana executives, including founder Lambert Onuma, who joined together in 2001 to create yet another data-based tech company in the Islands.

Convergence CT's management team (left to right) Lambert Onuma, Alan Ito, Rob Albertson, Brad Mossman and former Gov. George Ariyoshi. photo : Scott Kubo

"I spent some time in California, and I realized that the health care and pharmaceutical industries were really lacking in a lot of technologies," says Onuma. "So after we (former Gov. George Ariyoshi, Rob Albertson, Brad Mossman) all left Pihana, we said that was an area we should get into." Together, along with Alan Ito, the former chief information officer for the St. Francis Healthcare System of Hawaii, they formed Convergence CT and built a global health care data warehouse.

"Part of what we do is aggregate financial and operational data and then sell it to hospitals so they can compare the data to determine best practices," says Onuma. Heart surgeons in New York, for example, can study the methods of a team out in Hawaii. Sales of Convergence's DB*Focus software suite had been slow and steady throughout 2005, but this January, the company landed a $350 million, 10-year contract to build and house a database for American Medical Group Association subsidiary Anceta LLC. It was quite a coup for the Hawaii firm that competed with larger, established firms for the contract, but Onuma says it's just the tip of the iceberg.

"The contract is so much more significant than just a dollar value," says Onuma. "What's most valuable to us is just to have that data." That's because the second part of Convergence CT's revenue model involves selling aggregated patient data – for which it now has the exclusive rights for AMGA's 50+ million patients – to pharmaceutical companies. Industry experts estimate the worldwide health care information technology market to be more than $50 billion a year, with close to 10 percent of that being spent on patient data. With the new contract, Convergence is now perfectly poised to tap that market. "We valued that contract at $350 million, but we're being really conservative with that figure," says Onuma. "I think it's worth a lot more. But only time will tell."

>> GOOD DEALS

The Hawaii Venture Capital Association this year celebrates both Hawaii Superferry and Blue Lava Wireless as winners of its 2005 "Deal of the Year" and "Exit of the Year" awards, respectively. Last year, Hawaii Superferry completed more than $200 million worth of debt and equity transactions, enabling the purchase of its first two ferries and moving the company closer to its 2007 launch. Electronic game company Blue Lava Wireless, meanwhile, was sold to wireless entertainment publisher Jamdat (NASDAQ: JMDT) for $137 million.

COFFEE, TEA & BROADBAND <<

Just as heavyweights Starbucks and T-Mobile are a natural pairing, the latest coffee shop-wireless Internet provider marriage between The Coffee Bean & Tea Leaf and SkyWave Broadband makes perfect sense. SkyWave after all, is a small, locally owned and operated wireless provider with ambitious expansion plans. The Coffee Bean & Tea Leaf (a national chain operated locally by The Sullivan Family of Companies, which owns the Food Pantry and Foodland Super Markets) has a similar trajectory, with a total of 12 new stores planned for development this year.

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