Mystery buyer makes an offer for Hyro
Struggling digital agency Hyro has received an offer from an unnamed buyer to purchase the company.
The company, which has been through tumultuous times including losses, restructures, a capital raising to pay a $2.3m tax bill and this week a new CEO, made the announcement to the ASX today. It said:
“Hyro Limited today advises that an indicative offer has been received by an unnamed party.
“The board understands that the offer has been received in consideration of Hyro being the first and leading digital services provider in Australia with significant intellectual property enabling the company to partner both locally and globally.
The first and leading digital provider. I think not. In an age of digital services they have never made a profit and as far as I can tell have never generated any growth outside of the acquisitions they have made. This release is an indication of what’s in the Kool Aid in the boardroom. If they had all this IP someone would be buying it and things would have gone forward not backwards. I recently sold some Hyro shares and the share price is now so low that the proceeds did not cover the online service fee.
When the current crop of managers took over this business had a market cap of well over $100mill. The CEO at the time was forced out. Since he went the market cap has dropped to $9 mill and most of the cash they had is gone. Even in the 2011 FY they managed to reduce their cash reserves
In the 2011 their cash went down again and their sales were up 1.4%. Most other companies would have seen 20% growth and profit in this period.
Do the rest of the industry a favour and don’t claim leadership. Frankly it’s insulting to a lot of companies in this sector who have grown and made a profit.
Sounding a little bitter Trevor, you fail to mention, when in discussion on the CEO, that it was the ousted CEOs actions that set up the fall in market capitalisation, for example his legacy of $20mill of debt. It it was not for Bill Votsaris negotiating Hyro out a couple of rather large hot spots Hyro would certainly have disappeared.
Your statement of ‘Most other companies would have seen 20% growth and profit in this period.’ fails to take into consideration the industry that Hyro operates in, an industry which Most other companies would not have seen anywhere near 20% growth and profit in this period due to the current economic conditions and the large increase in competition from much smaller business’s.
As for the IP, someone sees value in it, maybe the ‘un named party’ is Management….
Hey Stuff I know nothing about the last CEO beyond what I wrote in the post. You obviously do. What I do know is that the Hyro press release talks about Hyro as a leader in the digital service space and most companies in this area are not feeling the “current economic conditions” but growing at over 15%. Also if this IP is so special and the Hyro place in the industry so unique it would be surprising if small companies were your competitors.
Sounds like you’re drinking the same KoolAid.
No wonder my phone has gone crazy! The ‘Trevor’ who has made the above comments are not mine :).
Nor mine.