Listed IT investment and advisory firm Interregnum has sold its holding in the ComputerWire Group to Datamonitor through receivers, Tenon recovery. Interregnum will receive an upfront cash payment of GBP500,000 and a future consideration of GBP700,000 million if ComputerWire meets certain expectations.
Interregnum is selling its investment at only book value. The cash received from the transaction will increase the funds available to Interregnum for working capital and investment purposes. The firm recently announced that it has put fund raising for its GBP75 million third party fund on hold, having struggled to reach its target in a tough fund raising market. The firm will resume the process as soon as there is an upturn.
Adrian Merryman, chief investment officer of Interregnum, said: “Exiting in this environment is not easy. We are very pleased with the exit given the market conditions. In a better market we would have looked for a better return on the investment.” He added that there were actually five bidders for the business: “We were fortunate that we had a valuable business we could sell. We were also delighted that we were able to take care of both the employees and the customers of the business.”
Interregnum acquired the loss-making business and assets (with a book value as of April 30, 2002 of GBP906,000) of ComputerWire in June this year through an administrative receivership process in exchange for an amount equal to the secured debt owed it of GBP1,024,000 plus GBP44,000 of cash. The net cash cost to Interregnum for the acquisition was GBP44,000.
Merryman said: “Through this transaction we are delighted to have achieved our goals of protecting the employees and customers of ComputerWire, placing the company in the hands of a talented strategic buyer who is well positioned to help ComputerWire realise its full potential, and increasing the likelihood of recovering nearly all of our investment in ComputerWire in the midst of a very difficult market environment.”