CloudCoCo Group PLC on Wednesday said its subsidiary, CloudCoCo Holdings Ltd, has entered into a deal to sell the entire share capital of the group’s IT managed services business, CloudCoCo Ltd.
Shares in the London-based provider of managed IT services and communications solutions more than trebled to 0.44 pence each in London on Wednesday afternoon.
The proposed sale to Gateshead, England-based IT managed service and cybersecurity provider Aspire Technology Solutions Ltd would go for a gross cash consideration of up to £9.2 million. This would result in a net cash consideration of around £7.9 million.
Proceeds from the sale would discharge all the group’s liabilities, including its existing loan notes with MXC Guernsey Ltd, with approximately £950,000 in cash left over for working capital.
The sale is subject to shareholder approval at the company’s general meeting on October 31.
Chair Simon Duckworth said: ‘The proposed sale of our IT managed services business marks a positive step for the group, enabling us to eliminate long-term debt and focus on expanding our value-added reseller operation, particularly in e-commerce, where we see significant opportunity. Alongside this, we are in advanced discussions for the sale of our connect business to further strengthen our financial position and streamline our proposition.
‘While financial 2024 has presented trading challenges, we are confident the strategic shift announced today secures the group’s long-term future and ensures a solid foundation for growth moving forwards.’
CloudCoCo expects to report full-year revenue for 2024 of at least £27 million, which would represent a 4.2% rise from £25.9 million last year.