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Summary:

UK investment manager Invesco Perpetual AiM VCT, which owns a minority stake in troubled voice-to-text firm SpinVox, appears, in its 08/09 e…

Christina Domecq

UK investment manager Invesco Perpetual AiM VCT, which owns a minority stake in troubled voice-to-text firm SpinVox, appears, in its 08/09 earnings, to have inadvertently confirmed rumours that paidContent:UK had received recently – that the company is actually up for sale.

Invesco’s market statement: “More disappointingly amongst the unquoted investments, since the year end, the company’s holding in SpinVox, the voicemail to text messaging business, was written down in value after the company chose not to invest in a further funding round, which was dilutive to non-participating investors. The business has been put up for sale, and it is possible that, should a good sales price be achieved, the new valuation may be exceeded.”

SpinVox’s PR is giving us a “no comment” but has asked Invesco to withdraw its statement, believing it was not for the investor (which is publicly limited) to announce the news. Invesco had invested £759,000 in SpinVox, but has devalued its perceived cost of this investment by 90 percent, down to just £76,000. Invesco owned 0.71 percent of SpinVox according to a July 8 Companies House filing, but SpinVox was recently forced to give further equity for emergency funding.

paidContent:UK understands some SpinVox staff had this summer hoped Cisco (NSDQ: CSCO), which SpinVox has been enabling with enterprise voice-to-text capabilities, would table a bid. But in the last two weeks attention turned to Massachusetts-based voice-to-text rival Nuance, which Independent.co.uk reported was interested in making an offer.

Neither approach has been confirmed, but it’s apparent that some kind of deal to rescue SpinVox from its financial predicament has been under discussion for some weeks. A sale may yet be for part, rather than all, of the company. It’s been in the market since 2003, but is no longer alone, with Nuance and SimulScribe making in-roads. SpinVox’s perception will also be impacted by recently heightened awareness of the fact that much of SpinVox’s voicemail transcription is carried out by human call centre operators, not technology. What price could SpinVox fetch at this point? Likely to be far less than investors have put in.

A sale could work out best for CEO Christina Domecq (who owns nearly 17 percent, according to the July filing), private investor Martin Hughes (17.9 percent), GLG (SEO: 066570) (15.72 percent) and CMO Daniel Doulton (8.8 percent). Share proportions may have changed following a recent emergency investment of over £15 million and the provision of a £30 million debenture loan.

Despite getting an estimated $200 million in funding until that point, we revealed how SpinVox recently resorted to paying some staff in equity instead of salary, scrapped many of its US execs and has faced legal claims from its suppliers for late payments, as cash worries gathered. Domecq told paidContent:UK on July 21 that fault lay with some of its vendors paying it late in the credit crunch and with a cash-intensive Latin America roll-out that would nevertheless make the business cashflow-positive within 90 days.

Read the full back-story in our SpinVox section

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  1. Burning cash ... Friday, September 11, 2009

    So £76K for 0.71 percent … makes them worth just under £11 million right? Wouldn't you be so happy if just lent them £15 million??

    Cashflow positive in 90 days – well she might be, walking away with some pocketchange as the company evaporates into nothing.

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  2. Your maths isn't quite correct. The 0.71% holding has been further diluted by some undisclosed amount, so it will be now somewhat less than 0.71%, and hence the value will be higher (based on your math which is keyed off the written down value rather than say some multiple of forward earnings – hah!)

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  3. Nice bit of legwork and reporting here!

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  4. I really don't think that Domecq should get anything except a prison term.

    I am sure there must be laws in the UK about FRAUD. Domecq & Doulton have committed fraud. It is really that plain and that simple.

    Any of the investors, including the smallest investor, should be able to demand an investigation which would most likely culminate in FRAUD charges being brought against them.

    They presented themselves as successful entrepreneurs from the United States. . . umm, well that company went bankrupt. Then the accounted for some time by saying Domecq sold a Yachting Business. Umm. . the Yachting Business was her father's, who was on the lam running from the United States Government and is now in prison in the United States. They invented "The Brain" also know as D2 that converts voice to text and *learns* all these different languages, dialects, etc. Umm. . .turns out to be a Mechanical Turk utilizing High Tech sweat shops for voice to text conversions.

    She deserves NOTHING but PRISON.

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  5. FINGERS CROSSED Sunday, December 13, 2009

    SOLD!!!!!!!! $150M

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