Australian arm of US digital video group Kit Digital placed in administration
Monday, January 7, 2013/
The Australian arm of global tech services firm Kit Digital has been placed in administration, with dozens of workers now out of a job as the business continues to suffer problems around the world.
The collapse also affects the company’s Australian subsidiaries, including a group of companies sold to the business by tech services firm Hyro in June 2012.
Hyro, which changed its name to Invigor Group after the sale, counts former iSoft chief executive Gary Cohen as a chairman. He had attempted to stop the sale to Kit Digital last year, although shareholders ultimately voted in favour.
PBB Advisory announced last month that Nicholas Martin, Marcus Ayres and Stephen Longley would be appointed as administrators to the company, which counts large firms including NAB and Foxtel as clients.
The collapse of the Australian arm is linked to the financial difficulties of its American parent. Last month, Kit Digital America announced it would delist its stock from the NASDAQ as of December 21. It had previously laid off 300 people in September.
PPB Advisory was contacted by SmartCompany this morning, but no reply was available prior to publication. Both Kit Digital and Gary Cohen’s firm, Marcel Equity, were contacted, but neither was available.
Kit Digital, which provides video management software, picked up a number of subsidiaries from Australian tech services firm Hyro in June last year. The sale was mired in controversy, with chairman Gary Cohen – who had previously served as chief executive of technology firm iSoft – recommending to shareholders at the time they vote against the deal.
After the Kit Digital deal went ahead, as per the shareholders’ vote, Cohen upped his stake in the remaining company to 20% through his Marcel Equity vehicle.
Hyro received shares in the Kit Digital US parent company in exchange for the subsidiaries, and then changed its name to Invigor Group. Invigor Group is now suing Kit Digital, saying in a statement on January 4 that it believes Kit Digital has breached its share purchase agreement.
Another Kit Digital subsidiary, Idaptive, is also in administration.
Clarification: This article originally referred to Gary Cohen as a chairman of Hyro, as a subsidiary under Kit Digital’s control. This is incorrect. After Hryo sold a number of its businesses to Kit Digital, it changed its name to Invigor Group. Gary Cohen remains chairman of Invigor Group, but the company has no ties to Kit Digital, apart from shares in the US parent company which it received for the subsidiaries in 2012.