SecureData is set to be left with one operating unit, its loss-making African division, after agreeing to sell SensePost for R36 million to one of its former businesses.
SensePost has been bought out by SecureData Europe, as the JSE-listed SecureData Holdings aims to focus even more on its biggest revenue-spinner, its African operation.
The sale follows SecureData's May 2012 announcement that it would sell off its profitable SecureData UK operation, which held its European assets, to focus on Africa. SecureData UK's management finally bought the unit, now SecureData Europe, last November.
Proceeds from the UK deal, about R207.5 million, went into settling debt and a cash injection for its African operations. Yet, SecureData Africa - its largest unit by revenue - is still running at a loss on an earnings before interest, tax, depreciation and amortisation (Ebitda) level.
SensePost, conversely, continues to be profitable and, in the year to July, turned over just more than 12% of SecureData's revenue for the year, and saw a slight decline in its Ebitda margin to 23.2%.
New era
In a blog post, SensePost says the agreement is the "culmination of a long period of negotiation between SecureData Holdings, SecureData Europe and SensePost management". It adds the deal is a "cordial and amicable arrangement that is considered to be to the benefit of all three businesses".
SensePost sees the move as heralding a "new era of growth and development that will see us better equipped and prepared to meet the requirements of the market and fulfil our mission of providing insight, information and systems that enable our customers to make informed decisions about information security".
SensePost, established 13 years ago, provides independent information security assessment services. It is a "niche" operator in the field of penetration testing and vulnerability assessment services and training, says SecureData.
SecureData says the sale is in line with the board's view that growth opportunities will come from its African operation, which provides the bulk of its revenue. The group, which has been restructuring since April last year, provides "the means for its end-user customers to keep their electronic data secure, available and reliable".
Cash from the sale will go into funding working capital for its African operations, it says. However, the sale will weigh on earnings per share, which are expected to drop by 30%, while headline earnings per share are expected to decline 27%.
SecureData's stock closed 12.5% higher at 45c on Friday, the day of the announcement.
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