Zaio Corp., a Canadian-based company that’s built a database of photos, valuations and property information through a network of local appraisers and photographers, has closed down its U.S. subsidiary, Zaio Inc.
All of Scottsdale, Ariz.-based Zaio Inc.’s employees have received notices of termination and the parent company will sell off its assets, Zaio Corp. said Thursday.
Calgary-based Zaio Corp. said it retains ownership of a database of 24 million photos and 140 million property records, and plans to maintain its current relationships with appraisal firms and zone owners in order to "redeploy its rollout strategy at a more favorable time in the economic cycle."
Zaio’s strategy has been to segment cities and counties into zones, selling the right to operate the zones to appraisers — a "highly scalable" model Zaio was preparing to roll out nationwide in the U.S.
In July, Zaio announced that it had sold 1,773 "zones" since the company’s inception, and had completed photography and data matching on more than 800. The 54 zones sold during the second quarter represented a slowdown from past results, the company said, blaming a downturn in the U.S. economy for a "more cautious zone sale environment."
Appraisers "want to see zones successfully brought to live status before committing to new zone purchases," the publicly-traded company disclosed to its investors.
Zaio this year launched a "Go Live 2008" program to enable lenders to obtain real-time appraisals by tapping already completed research and property inspections by local appraisers. In July, the company said it had brought 12 zones "live" in five counties in California, Arizona and Washington and was serving 500 lenders.
Last summer, Zaio acquired Buffalo, N.Y.-based appraisal firm Kirchmeyer & Associates and an affiliated company, real estate information provider Real Info Inc., for $5.5 million in cash and stock (see story).
A week ago, Zaio Corp. said it has reached a deal with James Kirchmeyer, the chief executive officer of both acquired companies, in which Kirchmeyer would buy back for $3.2 million the assets that were included in the deal. Zaio said it would retain exclusive rights to control and utilize the assets, and have the option to buy them back from Kirchmeyer for $3.2 million plus interest.
The agreement was aimed at allowing Zaio to retire $3.2 million of debt and obligations, while preserving a core part its appraisal operations and critical client relationships, Chief Executive Officer Douglas Vincent said in an Oct. 22 statement.
But Zaio Corp. said Thursday that Vincent and Kirchmeyer had resigned from the company’s board, and that Zaio founder Brad Stinson was assuming the responsibilities of chief executive officer on an interim basis.
An appraisal and collateral risk assessment expert with management experience at Citigroup, Countrywide Bank, and GMAC-RFC, Vincent was named Zaio Corp.’s executive officer in August, replacing Thomas Inserra. Vincent promoted Kirchmeyer from chief marketing officer to president of Zaio Corp. a week later.
According to a press release issued by the company at the time, Kirchmeyer founded his Buffalo appraisal company in 1994, and expanded it to "multiple offices providing services throughout the United States." He founded Real Info Inc., a company specializing in automated valuation models, in 1995.
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