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IMImobile to sell VAS business following strategic review
StockMarketWire.com
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IMImobile has entered into a conditional agreement to sell the VAS business unit to 'certain members of the existing management team', as it completes its strategy review.
As announced at the company's interim results in December, the VAS and Payments units have faced operational headwinds, which have been exacerbated by transaction volumes being impacted by the Covid-19 pandemic.
Following the strategic review, the board has concluded that a sale of the VAS business unit to the highly experienced management team is in the best long-term interests of customers and employees of this division.
The proposed sale is for a total cash consideration of £6.0m. £3 million of the consideration is to be satisfied within six months of completion of the disposal, with the remaining £3 million payable in full prior to the third anniversary of completion.
The consideration will be used by IMImobile for general corporate purposes. IMImobile has also taken the decision to wind down the activities of the Payments unit in the UK and US which represents less than 2% of the group's gross profit.
The activities of the VAS business unit predominantly focus on delivering products which generate additional value-added content services revenue for telecom operators and mobile application development.
The business model and target markets are different to that of the Cloud Communications Products unit with significant variations in go-to-market strategy as well as how customers are served.
The net book value of the assets subject to the disposal is approximately £14 million, and for the financial year ended 31 March 2020 the VAS business unit reported a loss before tax of £1.7 million.
The company will enter into a transitional services agreement following completion to ensure business continuity.
At 2:27pm: (LON:IMO) Imimobile PLC share price was 0p at 407.5p
Story provided by StockMarketWire.com
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