Terabyte sale clears the deck

By ADAM GIFFORD

Listed technology investor IT Capital has found a buyer for its 100 per cent shareholding in new media company Terabyte Interactive.

Chief executive David McKee Wright said the buyer did not want to be identified until the deal went unconditional on September 2.

"They could back out before then but I doubt they will," McKee Wright said.

"This sale will be the finish of our reconstruction of IT Capital."

Terabyte had been sold because it was not considered a strategic asset, even though it was not trading at a loss.

IT Capital bought Terabyte from INL and founder Craig Meek for $8.4 million in early 2000.

The purchase was driven by IT Capital's then managing director Keith Phillips, a previous Terabyte executive.

Meek said Terabyte deserved a good buyer. "IT Capital had a jewel, and they destroyed it."

He said Terabyte's 10-year history made it one of the oldest new media companies in the world still in business.

"Terabyte Interactive was the first investment [INL majority shareholder] News Corporation made in new media.

"They saw it as a way for their newspaper groups to explore the online stuff.

"We did a lot of projects for their groups around the world and helped them think through their strategies."

The departure of Terabyte from the IT Capital stable will leave computer screen developer Deep Video Imaging, in which the company has a 42 per cent stake, as the only big investment remaining since McKee Wright and partner Maurice Bryham were brought in to run the ailing firm.

Its minority shareholding in Australian web tools company Golden Orb has been written down to zero.

The management expects growth to come from controlling stakes in two companies bought from McKee Wright and Bryham - boat builder Sealegs and electric motor developer Conceptual Solutionz.

Shareholders Association chairman Bruce Sheppard, who has been critical of the IT Capital reconstruction, said Terabyte was a good "tool box" of skills and technologies in which a new owner could find value.

"Given IT Capital now wants to make boats and electric motors, it doesn't need the tool box."

In June, IT Capital reported a full-year loss of $21.4 million, compared with a $4.9 million loss the previous year.