Invigor: where to from here

The company formerly known as Hyro has undergone a significant shift over the past 12 months, with a new name, new board and new direction.

The former digital services agency is now a shell of its former self, being rebuilt from the ground up thanks to a major investment from equity firm Marcel Equity and its owners, brothers Greg and Gary Cohen.

Hyro is now Invigor, an investment company which recently announced it would buy almost half of IT company Global Group Australia. It spent $1.76 million for 40 percent of Global Group’s business, paid in 4.76 million Hyro shares at $0.37 per share.

Under the deal, Hyro acquired Global Group businesses Social Loot, online sporting event registration system Global Entries Online, digital solutions agency Global Internet Technologies Australia and 40 percent of recruitment management system Recruitment Adviser.

It’s the first step in a new direction for the company. Invigor’s board, consisting of the Cohens, former Hyro CEO Anthony Poiner, Global IT CEO Gary Munitz and COO Danny Sekers, as well as helicopter traffic reporter Vic Lorusso, have further investment opportunities in their sights, specifically in the healthcare market.

It’s a move that is popular with its shareholders - shareholders that were concerned the company was headed in the wrong direction when it sold off its main assets to US-based digital services agency Kit Digital.

A tough transition

That transaction was fraught with difficulty. Kit initially offered an all-share transaction, which was not well received. It later offered $17 million or $0.60 a share, with the option to foot part of the bill with around 2 million of its own shares, worth $US8.57 at the time, as well as $2 million in cash.

The companies continued to butt heads on price after Kit’s shares in early May dropped to $US4.62, greatly devaluing its offer for Hyro. To help get the deal through, Kit agreed to set a floor price to protect Hyro from further volatility with its stock.

Hyro will continue to trade until the end of December, until the shares acquired in the sale are released from escrow. At its peak, Hyro had a market capitalisation of $350 million. 

Greg and Gary Cohen were vehemently opposed to the takeover, just falling short of stopping it due to a very tight vote by shareholders - 49 to 51.

Greg Cohen told CRN the bid to stop the takeover was partially successful in that it forced Kit to offer some cash as opposed to its initial all-share bid. He said the risk involved in putting shares in a US company unable to be touched for six months, alongside risks involved with the exchange rate, turned off half the shareholder base. 

A way forward

He said the company now was reviewing the Kit investment and will look to maximise its value. 

“We haven’t decided whether we will sell or hold on to it for a while. We’re trying to get closer to that company, but we can’t do anything until the beginning of the year,” Cohen said.

“At the time we didn’t want the sale to go through, but that’s all water under the bridge and now we’re concentrating on the future, and we will be looking at very good strategic investments.”

Once the value of Kit is realised, the board plans to return a portion of the sale back to shareholders, to appease those who opposed the deal. It has negotiated a floor price for the shares of $14.7 million.

In the meantime, Invigor is planning on living up to its name by “re-invigorating” the company. It will move forward as a technology investment group, specialising in digital media, social media, marketing, and looking at the healthcare vertical. 

Cohen said 98 percent of shareholders had voted in favour of the Global Group transaction and Invigor’s new direction. 

“The old Hyro was more of an original digital media company, it was more a basic internet development group,” Cohen said. “We are much more now a consumer-facing development group.”

Healthcare is a major focus for the company. Cohen declined to comment on specifics but said the Government’s investment in the vertical offered big opportunities for the company. The company will leverage former iSoft founder Gary Cohen’s experience in the area.