Aurionpro announces exit from the Cybersecurity segment; Stock ends 4% higher

The deal, for the divestment of all stake held by Aurionpro in its cybersecurity business, is valued at a consideration of $9.6 Million (approx. Rs71cr).

May 07, 2021 04:05 IST India Infoline News Service

Aurionpro Solutions has announced the exit from the cybersecurity business with the sale of its investment to Forcepoint LLC., USA. The deal, for the divestment of all stake held by Aurionpro in its cybersecurity business, is valued at a consideration of $9.6 Million (approx. Rs71cr) which is net of all taxes and obligations.

From the total consideration, Rs45cr will be received upfront and the remaining amount to be received in tranches over a year upon fulfilment of contractual warranties and earn-out.

Paresh Zaveri, CMD – Aurionpro while announcing the exit said that it is disappointing to exit at a low value after all these years but, while we had a great team and product, there was a long road ahead in scaling up the business in the wake of covid-19 related disruptions and political instability in the region where the Company had signed key deal. The Covid-19 restrictions were causing inordinate delays in some large deals, particularly in the South Asian region. Therefore, the choice was between making significant further capital commitment over long term or accepting deal on the table. It was in the best interest of the Company to accept the deal."

Zaveri added, "on balance we will have more positives out of this, most importantly we have albatross off our back after this divestment. The cash proceeds from this deal will help accelerate our plan to be effectively debt-free by sometime after Q2 this year. The deal will also help financially as the strong and lean balance sheet is expected to significantly improve key performance indicators in the coming quarters."

With all business units having a strong outlook, Aurionpro said, "we expect the beginning of a new chapter of the long period of healthy and sustained growth for Aurionpro in terms of sales, profitability and free cash flows going ahead.

On Sensex, Aurionpro Solutions ended at Rs166.15 per piece up 4.37%. 

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