Advantage sheds web unit

By PETER GRIFFIN technology writer

Technology company Advantage Group has sold its Wellington-based web development operation to senior management.

Tony Stewart, the general manager of Advantage's e-Services unit, has picked up the business of Glazier Systems and will take 40 staff with him to continue as a standalone company.

Advantage bought Glazier in August 1999 for $7.1 million as part of the company's expected transformation into a major e-commerce player.

Four other multimillion-dollar acquisitions in the e-services area form the basis of Advantage's remaining e-Services unit.

Mr Stewart said he wanted Glazier employees to have a stake in the business.

He would hang on to 50 per cent ownership.

"I've bought the whole thing but I'm selling down my shareholding to a number of staff, from key personnel right down to some of the developers."

Mr Stewart said Glazier was managing to turn a small profit despite soft market conditions.

"We've been profitable for a few months and that's likely to continue as the overheads go back to that of a medium-sized company."

The sale follows Advantage's move to pull out of struggling software company Commsoft and e-tailer Flying Pig.

Advantage's e-Services made an operating loss of just over $1.6 million for the half year ended last December 31, in contrast to the company's payment solutions, retail automation and portable technology divisions, which generated combined profits of about $3.9 million.

The sale of the Wellington operation came as little surprise to analysts, who expected Advantage to focus on its disappointing web development business as part of restructuring.

Rob Mercer, head of research at brokerage Forsyth Barr, said Advantage had slashed costs in the e-Services unit over the past few months.

The unit was valued at more than $30 million before the Glazier sale.

The late announcement of the management buyout had no impact on Advantage's share price, which closed at 76c.