The former boss of FlyingPig.co.nz, Stefan Preston, claims that the sale of the FlyingPig business and brand leaves behind "valuable intellectual property and assets".
As part of yesterday's conditional agreement to sell FlyingPig to print and online publisher IT Media, Pacific Retail Group (PRG) buys up the remaining major shareholders in FlyingPig's holding company, Orion Ventures Limited, and on-sold the business and brand to IT Media. The price put on the assets has not been revealed.
The residual shell of Orion, together with the remaining intellectual property, will become a subsidiary of PRG. Advantage Group, which owned 25.44% of Orion pre transaction, and US Office Products-owned Blue Star Consumer Retailing, (18.9% pre transaction) will sell their shares to PRG (39.4% pre-transaction). On completion, PRG will hold an 89% stake in Orion Ventures.
Combined with a cash investment, the move gives PRG a 10% stake in IT Media, with FlyingPig CEO, Mark Battles to become group chief executive of IT Media, and also a shareholder. Other shareholders include IT Media founder, Tim Connell, with further strategic investors to be announced before Christmas.
"By taking payment for the assets in IT Media shares PRG has retained a stake in FlyingPig as part of a group better suited to manage its future development," says Preston, who ran the e-tailer as its executive chairman, but this year returned full-time to his roles as executive director and CEO of PRG.
Stefan Preston says Orion retains valuable intellectual property and assets, which could be used to further PRG’s own computing and Internet strategies.
IT Media publishes the magazines NZ Rugby, NZ Fishing, Rip It Up and Crème. It is also behind the newly-launched, Lion Red-sponsored Fire-engine.co.nz, which is described as "New Zealand's first fully interactive online men's magazine", and the pop music site Toast.co.nz.
Battles says FlyingPig is "absolutely delighted with the deal and the immediate opportunities on offer. As part of IT Media we gain access to a wide range of media channels and the ability to finely target audiences with the FlyingPig.co.nz offer.
"Each of IT Media's products is either market leader or number two in its category. Next to Amazon.com, FlyingPig.co.nz is probably the most recognised Internet brand in New Zealand."
Battles says FlyingPig will use the "significant cash injection" from PRG to speed up its break-even and to invest in Christmas retail spending. There will be five redundancies at FlyingPig.co.nz as a result of the transaction.
IT Media founder and Executive Director, Tim Connell, sees the addition of the FlyingPig brand to the business' portfolio as an integral part of IT Media's long term investment strategy and says the brand may be "stretched into new online properties".
"Online, we may see the FlyingPig.co.nz brand appearing on search engines, directories and community and content sites.
"Offline, IT Media can create new magazine titles dedicated to key growth channels within FlyingPig.co.nz, such as leveraging the current DVD database and creating a new title specifically for this niche market."