In another of the dramatic swings that have characterized the history of would-be Internet advertising powerhouse Zulu-Tek (ZULU), the company's chief stockholder has announced it will sell its stake in the firm to a little-known Hong Kong investor.
NetVest Capital Partners L.P. announced Thursday that it had reached an agreement with Hong Kong-based China International Equities to divest its holdings in Zulu-Tek and Enhanced Services Co. (ESVS) , a Texas-based company with a subsidiary that develops CD-ROMs. Zulu-Tek and Enhanced Services swapped stock in early March and subsequently announced their intention to merge into a single entity that will offer customers a wide range of interactive advertising and marketing services.
"NetVest provided the venture capital support to enable Zulu to acquire Softbank Interactive Marketing Inc., an industry pioneer in online advertising," said Roger Mincheff, president of Enhanced Services, in a statement. "NetVest also provided the vision to refocus these companies into Zulu."
NetVest, which brokered the Zulu-Tek and Enhanced Services deal, wound up with a major equity stake in both companies. It's unclear whether the transaction announced Thursday means that Pattinson Hayton, a known NetVest principal with a long history of scrapes with regulators and business partners, is ending his close relationship with Zulu-Tek and Enhanced Services. Little is known about the company assuming control of Zulu-Tek/Enhanced stock, including whether it is also controlled by Hayton.
"That's the billion-dollar question," said Heather Midgley of McDermott, O'Neill and Associates, the firm that handles investor relationships for Enhanced Services and Zulu-Tek, when asked if Hayton was associated with China International. "We haven�t been able to find out anything. I don't know the details of Pat's holdings, but I can tell you that Pat is planning to take a much lesser role [in the companies]."
Midgley said that NetVest, having steered Enhanced and Zulu-Tek onto their joint course, felt its mission had ended and that it was a good time to pass along its holdings.
