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Smartspace Software Sells Enterprise Software Business
Thursday 13 August 2020

UK-based smart building software specialist SmartSpace Software plc (AIM: SMRT) has completed the sale of its enterprise software business to US-based enterprise software company Four Winds Interactive's Four Winds Interactive UK Ltd subsidiary, the company said.

The company has received an aggregate cash consideration of GBP 4.6m (USD 6m), subject to adjustment following completion based on actual net current assets and its cash and indebtedness position, at completion.

A further GBP 0.4m is deferred pending the receipt of a refund of corporation tax in respect of R and D tax credits for the financial year ended 31 January 2020.

Following a review last year, the board decided that the nature of an enterprise software business with the challenges it faces did not fit with the company's strategy to focus on the small to mid-market, as demonstrated by the growth rate of SwipedOn and Space Connect operations.

The board believes that the capital employed in the enterprise software business would be better invested in creating value for shareholders through investing in growth of the Group's other businesses. SwipedOn is starting to generate cash for the group.

For Space Connect, the imminent launch of the new generation of the Evoko panels together with the growing network of indirect channel partners, as highlighted with the recent distribution agreement with Softcat, will also allow that business to become cash generative.

On 13 August 2020 SmartSpace entered into and completed a sale and purchase agreement, to sell the entire issued share capital of SmartSpace Global Ltd and certain contracts of its US subsidiary, Smartspace USA Inc., for an estimated consideration of GBP 4.6m, payable in cash on completion, together with a further deferred payment of GBP 0.4m, payable on receipt of corporation tax R and D tax credits.

The business sold, develops and sells 'Workplace', the Group's Enterprise platform and has 38 employees. Its revenues for the year ended 31 January 2019 were GBP 3.3m and the loss of the business in that period was GBP 1.3m.

At the date of sale, the unaudited proforma net assets being disposed after adjusting for intercompany funding of are approximately GBP 5.1m.

The sale and purchase agreement contains warranties and indemnities by the company usual for a transaction of this nature and a covenant by the company not to compete in the meeting room and desk management enterprise software sector for a period of three years from completion.

Founded in 2005, FWI is an enterprise software company for digital signage, interactive kiosk, and mobile applications used to digitally transform customer and employee experiences.
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Date Published: 13/08/2020

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