Kordia has sold Orcon to a group of private investors led by Vivid Networks director Warren Hurst.
Neither Kordia nor Hurst would disclose the sale price.
Orcon is a residential Retail Service Provider with around 56,500 subscribers, which represents about a five percent share of the fixed line market. Kordia confirmed it was in negotiations last month and Hurst is listed as a shareholder in Semple Investments, which had registered the name Orcon Holdings Limited in February.
Under the new ownership structure, Hurst will be a director and will own 48 percent of the company. The other 52 percent shareholding will be held by a legal nominee company. Hurst won’t disclose who these shareholders are, revealing only that they are a small group of private New Zealand investors who have been former investors in telecommunications companies “and the wider ICT area in general”.
The other three company directors are names as Maurice Kidd, who is described as an independent financial investment professional and has previously worked for Eric Watson and been a director of the Warriors rugby league team, Mark O’Donnell, CEO of House of Travel and Michael Boersen, CFO of Yellow Pages Group. Both O’Donnell and Boersen are on the board of Vivid Solutions – the video conferencing company which spawned Vivid Networks.
Scott Bartlett will remain as Kordia NZ CEO, and a new Orcon CEO will be announced shortly.
Hurst, who will become general manager, networks, says he is not interested in running the company. “It’s horses for courses, I have been there and done that [being a CEO]. It’s something I can do, but it’s not something I enjoy doing. I enjoy the technology side of the business, so while holding a directorship I will be more involved in the network itself... and I won’t be able to help myself get involved in the sales effort a well.”
Computerworld asked if it would be awkward for the new CEO to act as his boss, when he owned part of the company.
“I don’t think so, when you hear who it is you will understand why that’s not an issue.”
Hurst says his colleague Tony Reimann, who also a shareholder in Semple Investments, will take on the role of chief operating officer. “He will work closely with the CEO and really deputise. Tony has been a very good friend of mine and a deputy to me for a long time.”
Hurst is also promising another key executive announcement.
He says all staff who work for the Orcon business – more than 100 people – will be retained and the company will operate from the Orcon site on the North Shore.
Vivid Networks will be merged into the Orcon business and the Vivid brand retired. Vivid Networks provides highly secure, bespoke wide area network services to large private organisations and government agencies. Hurst says it has 12 high-end clients and seven staff.
In a statement issued today Kordia chairman David Clarke says the state owned enterprise is pleased with the sale.
“Under Kordia, Orcon’s annual turnover has increased by almost four-fold,” he says. “But structural changes in the market place mean there are likely to be better opportunities for Orcon with a different owner."
Kordia purchased Orcon from Seeby Woodhouse in July 2007 for $24 million. It had always been run as a separate business, until last year when it became part of Kordia NZ. The deal announced today includes all the assets that Orcon had before the merger.
Kordia NZ CEO Scott Bartlett says the sale will mean Kordia can focus on its business customers.
“Kordia is fundamentally a ‘B2B’ business, so being able to reset our strategy to better focus on delivering exceptional service to our business customers is really where we need to be.”
Bartlett says management from both parties will ensure the sales transition period “is as smooth and straightforward as possible.”