Intaz kicks off $10m float

By ADAM GIFFORD

A $10 million capital-raising bid by a software company backed by some of New Zealand's wealthiest people could be overshadowed by an intellectual property dispute.

Intaz is offering 10 million new $1 shares, amounting to just under a third of the company. It plans to use the money to market its SafeTnet health and safety software overseas. Its shares will trade on the unlisted securities market.

But developers of another health and safety package, Osprey, are believed to be considering legal action because of links between Intaz executives and Infinity, the company paid to build Osprey.

Intaz was put together by Wellington merchant bankers Cameron and Company to buy a controlling stake in Hamilton health and safety consultancy McIntyreWhite, whose principals, Dianne McIntyre and John White, developed the first version of SafeTnet in 1993.

The initial investing syndicate was Intaz Holdings, which includes Tower; the Savage family, who are former owners of NZ Safety; the Quaystone Fund specialist technology investor, run by Intaz chairman Mark Taylor and whose principals are property developers Adrian Burr, Mark Wyborn and Ross Green; former Fonterra director Mike Smith; and interests associated with Cameron & Company.

Another early investor was Massey University pro-chancellor Nigel Gould, who is on the boards of Intaz and Infinity.

Cameron & Company partner Nigel Bingham said the initial August 2000 investment was $2.8 million. Subsequent funding rounds raised $11 million to redevelop the software.

SafeTnet4, which is built on an Oracle database with the J2EE programming language and IBM Websphere web technologies, is undergoing testing with Woolworths New Zealand.

Bingham said Cameron & Company spent a year researching the market, and decided SafeTnet could be a world-leading product.

The new company's chief executive is Nigel Foster, a former director and shareholder of Wellington IT services group Comtex, which was sold to Infinity Group in August 2000. He remains an Infinity shareholder.

He said that, while he was aware of the Osprey product Infinity was working on, "my understanding is it was and still is a somewhat embryonic proposal".

There was no link between Intaz and Infinity "in an operational or investment sense".

Osprey's designer, Dr Jim McLeod of Whangarei-based Company Health Services, said a version of Osprey had been ready since Christmas and "we have been out there trying to sell to clients".

He designed the software because of his frustration at the limitations of other packages on the market.

Former Infinity director Murray McCaw confirmed it supplied software development services to entrepreneur Matthew Blomfield to build a health and safety application.

"My involvement was looking at some payment options for it, which could have involved Infinity taking an equity position. That idea is long dead and buried," he said.

There could be no intellectual property leaks between the SafeTnet and Osprey projects.

"Foster and Gould would not have had a clue what was going on," he said. "I would not have known the software. I was looking at the equity aspects so I had a look at the business plan. I never heard anything about it at the board table."

Since leaving the Infinity Group board at the end of last year he has been consulting in strategy and marketing, including "giving a bit of advice here and there" to Intaz.

Mr Blomfield was yesterday talking to lawyers and would not comment.

The Intaz prospectus makes it clear its backers think there is a big opportunity to make money. Projected earnings for the year to March, based on selling the earlier version of the software, are just over $1 million. But that jumps to $16.4 million next year after the release of SafeTnet4 and climbs to $86 million by 2005.

Chairman Mark Taylor said Intaz was chasing $17 million in sales in Australia through a co-selling arrangement with Oracle, which is using SafeTnet4 as part of its human resource management solution.