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Iguana2 bought out while Dattatech targets Alphawest 6

Iguana2 bought out while Dattatech targets Alphawest 6

Management buyouts became the flavour of the month when management teams from subsidiaries of Solution 6 Holdings rallied to bail out of the ASX-listed company. The first confirmation came late on Friday when the management of Iguana2 announced the purchase of Solution 6 Iguana (trading as Iguana2) from Solution 6.

Financial details of the transaction were not disclosed.

Founded in New Zealand, Iguana2 was bought by Solution 6 in 1999. "Now the two original Kiwi founders and current management of the company, Adam Rands and Scott Cooper, have the business back in their hands," read a statement to the ASX.

Iguana2 runs two share market information Web sites, ShareChat.co.nz and Stocknessmonster.com, and supplies share market data to stock brokers and listed companies.

Meanwhile the wheels are turning in the sale of Alphawest 6, with integration and knowledge management company Dattatech linked with the potential management buyout of the services business.

The moves come as Solution 6 attempts to rid itself of its services and non-software application businesses.

ARN understands Dattatech's managing director, Matthew Tutaki, has been in negotiations with several key management staff of Alphawest 6 and its parent, Solution 6, to back a management buyout plan for the company.

Tutaki refused to answer ARN's enquiries, but sources within Alphawest 6 confirmed he has been in contact with Solution 6's managing director, Neville Buch, who is said to be involved in the proposed buyout.

Other personnel linked to the sale include Garry Henley, Alphawest 6's founder and managing director, and John Perkins, NSW general manager and founder of Balanced IT, a company Alphawest 6 acquired last year.

But it might be weeks before any formal announcement is made on the fate of Alphawest 6. Des O'Dell, general manager of strategy and planning at Solution 6, confirmed the company is in an "exclusive due diligence" process with one prospective buyer but said that processes has been "going on for weeks" and is only half over.

The deal currently being brokered involves not only the sale of Alphawest 6 but the entire stable of Solution 6's IT services businesses. This includes Dataline 6, Evolution 6 and Portico 6. "Once a binding agreement has been signed we will make an announcement [to the ASX]," said O'Dell.

However, O'Dell has not ruled out the possibility of other bids, with Solution 6 still in negotiations with "a number of interested parties".

In a buyer's market the biggest challenge Solution 6 has now is to get a decent price for its working assets. O'Dell said Solution 6 would not "rush" a sale but would attempt to get the "best price for shareholder value".

Although Solution 6's IT services businesses accounted for almost as much revenues as its Professional Services and Software (PSS) division ($71 million and $78.1 million, respectively, for the half year to December 2001), the services business reported a 5 per cent decline in margin profits. This compares with an 11 per cent gain in margin profits for the PSS division.

The proposed buyout comes at a time when morale within Alphawest 6 has slipped to an all-time low, according to sources in contact with ARN.

"We never were really a part of Sol 6 and we haven't been able to grow outside what we do," said a company employee, who wished to remain nameless. "I think [the management buyout] would be the best thing and I am supportive of it if it happens. I'm not too sure what the ramifications would be, but you can't get much lower than where we are at the moment. Morale isn't the best."


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