By NZPA
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Wednesday 15th January 2003 |
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In a deal struck yesterday, KidiCorp will back into Feverpitch International, a gambling software venture that listed on the New Capital Market in 2001 but never took off.
From trying to drum up business in the gambling capitals of the world, Feverpitch switches to looking after preschoolers.
KidiCorp is described as owning or managing more than 40 childcare centres in the upper North Island, including a chain called Top Kidz.
Feverpitch said the deal was subject to the due diligence of both companies and the approval of Feverpitch shareholders and the Stock Exchange.
The intention is for the new entity to graduate from the near-defunct New Capital Market to the main board of the Stock Exchange.
Feverpitch managing director Derek Handley said KidiCorp wanted to grow rapidly and a capital raising was the likely next step.
The company is owned by father and son entrepreneurs Wayne Wright, of Tauranga, and Wayne L Wright, of Wellington.
They say they founded their first centre in Tauranga in 1996.
A statement from Feverpitch said the "highly fragmented" childcare market was worth more than $500 million a year.
KidiCorp claims a share of under 2 percent, indicating the company's annual revenue is less than $10 million.
A rash of childcare company listings in Australia over the past two years -- the likes of ABC Learning Centre, Peppercorn Management Group and Child Care Centres Australia -- have stood out as top performers. One news report said the strong demand for childcare meant the children of working parents were Australia's "boom industry".
Announcing the deal to the Stock Exchange yesterday, Feverpitch talked of giving shareholders the chance to experience "the exciting developments that the Australian sharemarket has seen recently in childcare".
Feverpitch has 8.85 million shares on issue. It said it would issue KidiCorp with 117 million shares with a nominal value of 10c each, or $11.7 million in total.
No money changes hands in the deal.
The Feverpitch share price closed yesterday at 25c -- more than double the previous 12c -- but on tiny volumes.
Launched with the support of former All Blacks coach John Hart, Feverpitch limped along after failing in its capital-raising goals.
Mr Handley said the company needed $3 million, but secured only $1.6 million -- with $400,000 of that eaten up by costs associated with listing on the New Capital Market. In December, it reported a half-year result of a $2.95 million loss.
He said the company ended up with two assets: its gambling software and its listing.
The deal with KidiCorp sought to realise the latter.
As for the software: "How we dispose of it, or what we do with it, is probably going to be decided over the next couple of months."
Mr Handley said the directors were disappointed by Feverpitch's lack of success, but the new deal was "an excellent opportunity for shareholders".
An information memorandum, including an independent appraisal of the proposed transaction, would go to shareholders before a special meeting next month.
The Wrights were not commenting on the deal yesterday. The statement said the Feverpitch name would be changed to "something more suitable to the shift in direction for the company".
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