Spike CyberWorks to end its year with acquisitions
Wednesday 06 June, 2001 10:38 GMT+10:00
By ALISON BELL, AAP
Spike CyberWorks may be set to acquire substantial interests in Hong Kongbased SoftPub.com and Linux Center but will fail to break even on its cashflow for fiscal 2001.
The digital services company, a subsidiary of Internet group Spike Networks, will acquire a 35 per cent interest in SoftPub from techpacific.com for $US1.4 million, Spike Networks said yesterday.
Spike CyberWorks will also acquire a 45 per cent stake in Linux Center from techpacific (BVI), Applied Research Council (ARC), and Nirvana Capital at an aggregate value of $US590,000, Spike said.
As well, Spike CyberWorks will issue new shares in the company to techpacific, ARC and Nirvana in consideration of the acquisition of their interests in SoftPub and Linux Center.
After the deal is completed Spike CyberWork's share register will comprise techpacific's 54.4 per cent stake, Spike Networks' 43.8 per cent holding, Nirvana's 1.3 per cent basket, and ARC's 0.5 per cent share holding, Spike said.
SoftPub is a Web service solution provider, while Linux Center is an application developer and computer operating system consultant.
Spike CyberWorks' newly appointed chief executive Peter Williamson said the acquisitions would enhance the company's digital and eenablement services in the AsiaPacific region.
"We anticipate that the synergies these companies will bring to our current activities will be very valuable," he said.
But the acquisitions come at a time when weak market conditions will push Spike CyberWorks into an operating cash flow negative position by June 30, 2001.
"Spike CyberWorks' earlier expectation that it would achieve an operating cash flow break even result by the June quarter of FY2001 will not be met," warned Spike Networks' executive chairman John McGuigan.
In February Spike Networks reported a net loss of $10.174 million to December 31, 2000, including equity accounted losses attributed to Spike CyberWorks of $8.004 million, which includes oneoff charges in the amount of $1.135 million.
Revenue for the six months was $3.526 million, down from $7.309 million for the previous corresponding period following changes to accounting polices brought about by Spike CyberWorks' joint venture with Pacific Century CyberWorks.
Meanwhile Spike Networks' radio subsidiary, SpikeRadio, had been cashflow positive since December 2000.
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