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Seed Innovations Ltd on Wednesday said the unit holders of portfolio company Fralis LLC - which trades as Leap - have agreed to sell Leap to an existing unit holder IMG Arena US LLC, based on an enterprise value of €14 million.
IMG will become the sole owner of Leap after the transaction. Seed expects to receive around €5.6 million in cash over a two-year period, as well as the repayment of a €250,000 term loan plus interest.
Seed Innovations Chief Executive Officer Ed McDermott explained: ‘After several years of a strategic partnership between Leap and IMG this is the natural next step in Leap’s development. The opportunity to divest our interest in Leap, which is increasingly anomalous with the rest of our portfolio, for cash, is prudent given the continuing challenging market conditions which make a successful public market listing for Leap in the short to medium term unlikely.’
The expected total blended return on investment over all the Leap investments is ‘disappointing’ at 4%, Seed noted.
‘It is not the exit we envisaged but provides liquidity and enables Seed to continue to refocus our investment portfolio whilst at the same time setting Leap up for further success in the future,’ CEO Ed McDermott added.
Seed shares were 1.2% lower at 2.48 pence each in London on Wednesday at midday.
By Tom Budszus, Alliance News reporter
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