IT products distributor Renaissance’s e-commerce arm, Conduit, has secured joint ventures in three targeted Asian countries and made its first offshore sales in the lead up to listing on the Singaporean Stock Exchange.
The Malaysia, Thailand and Hong Kong partnerships have come as Conduit finalises a $S5 million ($6.6 million) investment in the company by a subsidiary of Singapore’s largest development bank, DBS, for a 16.67% stake and is rejigged to become a wholly separate company.
Renaissance shareholders will now vote on the DBS Bank Nominees investment - which will be used to help market the joint ventures and establish a Singaporean office - as well as discuss further listing and company structure details at a meeting on February 7.
As well as DBS’ investment, which values Conduit at $40 million, DBS intends to underwrite Conduit’s public share offering in Singapore, for which a date has not been set.
“It really is becoming a Kiwi exporting story,” says Renaissance director Clive Lewis. “These partnerships give us a leg up into existing markets where we can get our product out to their clients and beyond.”
Conduit’s Malaysian partner is Lityan, a Kuala Lumpur Stock Exchange-listed systems integrator and networking company that is moving into e-commerce projects. Its Hong Kong partner is the large distributor Vector, while its partner in Thailand is still under wraps. These three follow a partnership with Australian software distributor and manufacturer Evolve 360, announced late last year.
Conduit, meanwhile, has made its first international sales into Australia. One of these business-to-business sites is for Sheppard Industries, which sells Avanti brand bikes and has bought a third of its 150 Australian dealers online since its Australian site’s launch in mid-December. Its local site has been running since September last year.
Lewis says most of Conduit’s clients’ new sites are for non-IT companies, which are looking for a non-propriety back-end engine to their websites. Conduit plans to host its client’s sites from all parts of the globe from New Zealand. Even after listing, the majority of Conduit’s staff – today numbering 35 – will be based here working on development and installation.
Renaissance shareholders are to be asked later if they want to participate in a complex share buy-back scheme where a certain, equal portion of their shares would in theory be cashed in and exchanged for a direct shareholding in Conduit. The plan would mean Conduit would be an independent company with significant shareholders rather than a subsidiary. Renaissance directors believe it will allow both companies’ share prices to reflect their different businesses: one in distribution and one in e-commerce.
Conduit has over 30 sites locally and Renaissance itself was the first user. Palm distributor Insite Technology, which Renaissance bought in August last year, recently finished implementing the Conduit system to run its online sales. Renaissance now says it does over $5 million a month over the web – or 40% of its business.