Cromwell falls under InterX spell
Merger puts £226m tag on Broadvision Wannabe
InterX, the parent company of UK distributor Ideal Hardware and hardware info site the IT Network, is to merge Cromwell Media into its operations. The deal sees InterX hand over 11.94 million shares to Cromwell, priced at £11.80 each at the close of play yesterday, in return for the remaining 63 per cent of the company – it already held a 37 per cent stake.
The deal values Cromwell at £226 million. Cromwell is a media company-turned software powerhouse and develops seriously techie Web content personalisation/ marketing/tracking software called Bladerunner. Currently this is used by a handful of customers, including InterX subsidiary, ITNetwork.com and NMTV's Silicon.com.
Cromwell names Broadvision and Vignette as competitors. But it's going to take a hell of a lot of money to take Bladerunner onto the world stage. For the present, InterX has got the capital raising sussed out: the company is taking advantage of its huge leap in share prices to issue £30 million of new stock.
This will fund Cromwell's expansion plans for months to come. In an announcement made earlier today, InterX said it would appoint Philip Crawford, EDS International president, as part-time chairman. Cromwell gets a new CEO – Robert Bruce, ex MD of Broadvision UK. The takeover is expected to complete by the time InterX announces interim results in March.
News of the merger deal coincides with the appointment of Rob Wirszycz as chief executive of IT Network. Wirszycz joins ITNetwork from EDS. Prior to that, he was at industry body the CSSA. All InterX has to do now to turn itself into a pureplay Net/VC holding vehicle is to sell Ideal Hardware, its IT products wholesaler.
Broadview, the investment bank, is hawking the company to US disties (which may be keen to get its hands on Ideal's Compaq franchise), and it should be close to a sale by now. But for how much? In this climate, anything more than £60 million (cash) could be considered an excellent deal. ®
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