IT Capital Expands Global Reach To Europe, Nth USA
IT Capital Expands Global Reach To Europe And North America
Long-term Strategic, Operational and Co-Investment Relationships Formed With Leading US Venture Capitalists
AUCKLAND, 21 December 1999 - IT Capital Limited (ITC) has reached another milestone in its development with the announcement of a strategic relationship with two key US venture capital companies, Cross Atlantic Capital Partners and Snider Capital L.P. The agreement involves both companies investing in the Australasian venture catalyst through a private placement, which will raise proceeds in excess of NZ$8 million. In addition, both institutions will appoint representatives to ITC’s Board of Directors with the intention of leveraging their investment by providing significant resources and capital through co-investments in technology deals with IT Capital. The collective funds under management of these firms are US$335 million.
“This major investment is the successful conclusion of a two month due diligence process,” explains Jeff Dittus, Chief Executive Officer of IT Capital. “Before committing, both institutions made extensive evaluations of IT Capital’s management team, the information technology market in Australia and New Zealand, as well as the region's venture capital environment and business climate. Their support confirms IT Capital’s position as the leading venture capital company in the marketplace, as well as the region’s potential to produce world leading technologies and companies. The partnership structure will maximise the efficiency in which we work together to globalise Australasian technologies.”
Cross Atlantic Capital Partners (www. XACP.com) manages funds making venture capital investments in innovative technology companies in the United States, Britain and Ireland. XACP actively contributes to the cross-border growth of companies by assisting with access to strategic resources. Furthermore XACP is an investor in Brainspark, an incubator/seed investor for Internet and e-Commerce companies in Britain. Investors in XACP's funds include Safeguard Scientifics, the Pennsylvania Public School Employees’ Retirement System, Bank of America and Robert W. Baird and Co, to name a few.
“Most significantly, this partnership provides IT Capital with access to a very broad group of potential co-investors and strategic buyers for our portfolio companies”, says Keith Phillips, IT Capital’s Managing Director. “While the biggest challenge in New Zealand remains our distance from these players, a strategic relationship at this level greatly assists us in bridging the gap.”
XACP was founded by Don Caldwell and Glenn Rieger, formally of Safeguard Scientifics, the venture capital company upon which IT Capital is modeled. “We started XACP to capitalise on the abundance of innovation coupled with the shortage of venture capital in the Irish and British markets,” says Don Caldwell, CEO of Cross Atlantic and former President and COO of Safeguard Scientifics. “Furthermore, we recognised the resulting valuation mismatch between technologies developed in these European markets and the United States.”
“A similar discrepancy exists between the USA and Australasia, and what attracted us to IT Capital was the management team and international network they had in place to take advantage of this. By working together with IT Capital, we are building an efficient mechanism for the rapid distribution of these new technologies in the region,” says Caldwell.
Snider Capital L.P. (www.snidercapital.com) is a newly formed venture capital company which invests in Internet based information technologies. The principals of Snider Capital are leaders in the media and sporting industries in the United States. The Snider family have owned and operated radio and television stations including the largest sports satellite broadcasting network in North America, as well as professional hockey and basketball franchises and the largest sports arena management company in the United States.
Ed Snider is the current Chairman of Comcast-Spectacor, a partnership created in a US$500 million dollar transaction in which Comcast bought from the Sniders a majority interest in the Philadelphia Flyers, 76ers and several sporting arenas. Comcast, (“CMCSA” Nasdaq) is one of the largest cable companies in the United States and a leader in high speed internet access, interactive television development, content provision and, most recently, a founder of the Internet Capital Group, a leading business to business e-Commerce company.
“The Sniders’ participation in IT Capital is significant because of their well established relationships at the highest levels of the media and communications industries,” says Jeff Dittus. “With the continuing convergence of land based and wireless telecommunications, the Internet, broadcast and cable television, and the media and entertainment industries, access to these relationships will be vital to enable us to enter and exit investments, and ultimately grow.” Further, Snider L.P. has a number of successful entrepreneurs who have built significant franchises and IT Capital’s portfolio companies will be able to draw on this expertise.
“ITC has clearly established its leadership position for global Internet investments,” says Jay Snider, President of Snider Capital L.P. “The company’s extensive links with the east coast of the United States, currently the hub of business to business e-Commerce in the world, offer us numerous advantages as our partnership progresses. Our investment is testament to our confidence in ITC’s strategic vision and management.”
The funding of XACP and Sniders’ investment in IT Capital will occur in two stages:
Stage 1: Under the existing shareholder authority to issue new common stock up to 10% of the fully diluted capital base, IT Capital will issue 8.4 million and 5.4 million shares to XACP and Snider respectively by Friday, December 24. Both institutions have committed to hold these shares for a minimum period of 12 and 6 months respectively.
Stage 2: IT Capital will seek shareholder approval to issue 6.2 million and 6.5 million shares to XACP and Snider respectively, subject to IT Capital shareholder approval which will be sought at a special EGM on January 14, 2000. Both institutions have agreed to hold these shares for a minimum of 6 months. Also at this meeting, ITC will be seeking shareholder approval for the acquisition of Terabyte as well as several other procedural issues.
The strategic investment will allow Cross Atlantic and Snider to appoint a nominee respectively to IT Capital’s Board of Directors. The appointment of these individuals will be finalised in January, 2000.
IT Capital is Australasia's leading venture catalyst. The company focuses on investing in New Zealand and Australian based e-Commerce companies with the intention of transplanting them into larger overseas markets, principally the United States. It addresses the funding gap that currently inhibits a vast number of innovative Australasian firms by providing early stage funding and management expertise that is not readily available in the local markets. IT Capital’s international network of venture partners and technology companies accelerates global technology transfer.
IT Capital provides a basket approach allowing investors to diversify risk and participate in e-Commerce opportunities, giving public market investors access to leading Australasian companies at private market prices.
More information on IT Capital Limited is available on the web at http://www.itcapital.net, while information on Cross Atlantic and Snider Capital can be found at http://www.XACP.com and http://www.snidercapital.com respectively.
further information, please call:
Jeff Dittus, CEO, IT Capital, United States – tel: 00 1 610 688 1598
Keith Phillips, Managing Director, IT Capital, New Zealand – 64-9 375 2595
Nicholas O’Flaherty, Senior Account Manager, Botica Conroy & Associates, Tel: 64-9 303-3862