Just five months after it paid roughly $8 million in cash and stock to acquire New York-based interactive agency Iguana Studios, its parent company Change Technology Partners, Inc. (OTCBB:CTPI) is closing the office.
Former employees said the former Iguana Studios office was as good as closed as of last week but a receptionist at the company’s Greenwich, Conn., headquarters said the closure was slated for next month.
Calls to the chief executive of CTPI, William Avery, were not returned by press time.
Iguana was a highly regarded digital services boutique specializing in scalable vector graphics, animation and other rich media when CTPI purchased it in early March.
The deal had all the markings of a roll-up strategy that had been deployed during the past two years by other, now-troubled interactive firms such as Razorfish, Organic and Agency.com, which pursued acquisitions in order to buy specific digital services skills. The purchases were later written down as they laid off staff to reflect the imploding digital services sector.
The origins of Change Technology Partners are in a $40 million investment that its main backers, FG II Ventures and The Culmen Group of Texas, put into New Mexico-based shell company Arinco Computer Systems. The company’s name was changed to Change Technology Partners and its strategy of acquiring stakes in Internet services and infrastructure plays was off and running.
Even during the height of the shakeout among interactive agencies that fell on hard times when the dot-com bubble burst, CTPI kept a contrarian view of the scene in its roll-up strategy.
“We feel strongly that (in this marketplace) the good has been devalued along with the bad and if one is careful, there’s a terrific buy-side opportunity,” the former CEO Matthew Ryan told atNewYork.com at the time of the purchase.
A former employee of Iguana said the founders of the firm took buyout packages shortly after the CTPI acquisition and that the parent was in the process of trying to sell parts of the firm’s practice.
Ryan was replaced by the firm’s board of directors in early July, just days after he announced the launch of a new IT diagnostic, advisory, planning, implementation and integration services division.
Iguana came to the roll-up party with about 60 employees at the time of the CTPI buy-out. The firm’s rich media expertise, and its New York office, were supposed to be the nucleus of the company’s New York operations.
CTPI is publicly traded on the over-the-counter bulletin board as CTPI. Its shares were trading for 8 cents as of Monday.
As of the end of March, it most recent quarterly report with the Securities and Exchange Commission, it listed $24.5 million in cash (not counting the Iguana and another latest acquisition). Its net loss for the period was $6 million (11 cents per share) on revenues of $1.9 million. Year-ago results were not material because it was operating as a different company at the time.
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