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Businessman Peter Maire has sold a block of his Rakon shareholding, partly to fund fast growth at Fusion Electronics after being unable to attract private equity.
Probably best known for founding marine electronics and global positioning technology company Navman, Mr Maire has also been involved in several other
technology companies as a shareholder and director.
Quartz crystal components company Rakon is among those, and today said Mr Maire had advised it of his intention to sell between 2 and 3 million of the 14.9 million shares he holds in the company.
Mr Maire said it was an extremely reluctant sale, but in the current New Zealand market situation, with a non-existent private equity market, he saw no other option.
He intended to boost investments into several growing New Zealand high-tech companies through his investment vehicle, Tahia Investments.
Those companies included Auckland-based consumer electronics company Fusion, in which Tahia's stake would lift to above 50 per cent.
"We've spent three months trying to raise equity for Fusion, and we came very close only to hit this world (financial) meltdown," Mr Maire said.
"Fusion's in an incredible growth mode, and we just couldn't starve the company for capital any longer.
"The private equity market here has just completely shut its doors."
That had happened in the past three months, and now no one in private equity in this country was interested in anything other than mature positive cashflow-type investments, he said.
"When it comes to technology, rapid growth, we don't have a skilled private equity base here in New Zealand with experience in these sort of businesses."
Fusion had been structured for growth during the past few years, with new products developed and the marketing footprint into Europe and the United States had grown.
"Just in the past month, we've struck some very, very significant orders."
Those included three new products in the Best Buy chain in the US, and a supply contract with another global electronics company but he could not provide more details, Mr Maire said.
Fusion now had to fund tens of millions of dollars of forward orders.
"It really just pushed me into a corner. There was really no other option but to sell a bit of Rakon which I do very, very reluctantly.
"I think everyone's well aware of the growth that Rakon is going through now that we've got the Indian and China strategies bedded down," he said.
Fusion originally was a brand and marketing play with products sourced from Asian suppliers.
"In the past two years we've bought in a very skilled engineering team...and we developed some world leading product platforms."
The products included a new car audio head unit with an internal iPod dock that had just been launched into Best Buy. A similar marine product had also been developed, Mr Maire said.
"So, the company's exploding with growth and we daren't choke the thing to death by refusing orders."
Fusion would have a turnover of about $35m this year, heading towards $50m next year, and was a long way from considering an initial public offering.
"Maybe in three or four years we might look at that. We need to get to a couple of hundred million in sales."
He did not know the details of the sale of his Rakon shares, but soon after the sharemarket opened today the sale of 3.15 million shares in the company at $2.35 was recorded.
- NZPA
