A fallout between partners has resulted in a management buyout of Kytec Group, according to co-founder, David Okulicz, who said a move to restructure the organisation was required to allow the business to continue to develop and progress in accordance with its business plan.
“We structured a management buyout due to a partnership dissolution and then subsequent to this, put the old shell company into administration,” Okulicz told ARN in an exclusive interview.
Okulicz said the partnership dissolution was a result of a differing opinion in the direction that the company needed to take.
“Kytec has always been a specialist organisation known for its technical expertise and business focus. We see ourselves as ‘joining the dots’ allowing customers to deploy relatively complex solutions with the minimum of fuss. The decisions made in relation to company direction needed to display this at every turn; we cannot be all things to all people,” he said.
Following the management buyout, the old company, Kytec Solutions Pty Ltd, was placed into voluntary administration, appointing Glenn Trinick, from Debt Crisis Solutions.
Okulicz called the management buyout a positive move for the company. “It is a dissolution of the partnership. We have structured a management buyout, which is a good news story as it will make the company more agile and allow for growth. It is an exciting time for the group,” he said. “It will reinvigorate our focus on changing things and improving things.”
He claimed the company is on the verge of rolling out a rebranding of the group with some new office moves. “There is a rebranding coming shortly,” Okulicz claimed. “It is pretty unique and will assist us in growing the business.”
The core technology focus areas of the company are networking, collaboration and contact centre with the main office based in Melbourne and smaller offices in Perth and Sydney.
“Also important to note is that it is business as usual - all staff were transferred to the new entity and we continue our dedication to our customers,” he said.
Okulicz said Kytec is renowned for its expertise around key vendor partner, Cisco, particularly in the area of collaboration, networking, wireless and contact centre solutions. “Our customer’s partner with us because of our expertise around these core offerings and the resultant service they receive. If we were to expand our offering too far we would compromise the value we bring,” Okulicz said.
The news about Kytec going into administration saddened fellow company co-founder Ben Donaldson, who also spoke to ARN in an exclusive interview about his new business venture (PSQ Group) and shared his insight about the past. Donaldson left Kytec Group on September 23, 2013 to pursue other interests.
Despite numerous accolades (named Cisco’s Asia-Pacific Small Business Partner of the Year award in 2010 and ranked 31st in the BRW Australian top 100 Fast Starters list of companies in 2010), Donaldson claimed Kytec was having a few business issues at the time of his departure.
Donaldson said the company saw record growth. “Kytec grew from $0 to $13 million dollars turnover in my time there,” he said. “We grew at a stupid rate, and looking back, we grew at an unsustainable rate.”
In his opinion, he said the company lost the customer focus. “It very much is a story of massive growth. David and I then misaligned. I saw that we had lost the vendor relationships, that we had lost the relationships with the customers. We’d lost the customer focus, we’d lost the buy-in from our staff. I think that’s probably represented by the fact that 37 staff left in the six months after I departed,” Donaldson claimed.
“Certainly towards the end of my tenure there, David and I had fragmented. David saw the business going one way and I saw it going another, and rather than tear it apart at the seams, which is where we would have gone if we kept going down that path, I made the decision it would be best if I departed.”
Okulicz and Donaldson, like-minded entrepreneurs who met while they were both network infrastructure engineers working for Accord Technologies, started the business “out of a garage” back in 2006 after identifying a gap for IT and communications in the mid-market.
The duo realised the potential, particularly in the hospitality sector, education, mining and finance and watched the business grow at a phenomenal rate, with a staff head count of 52 in its heyday.
Despite the separation, Donaldson said left the company on amicable terms.
The adminstrators have been contacted for comment but at the time of going to press had yet to respond.