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Vortiv (ASX:VOR) to sell cybersecurity arm

Technology
ASX:VOR
22 October 2020 12:30 (AEST)
Vortive (ASX:VOR) - Chairman, Gary Foster

Source: Vortiv

Vortiv (VOR) has signed a conditional sales agreement to hand over its cybersecurity businesses to CyberCX.

CyberCX is one of Australia’s leading cyber security services organisations and has agreed to acquire 100 per cent of Vortiv’s businesses.

These include Cloudten Industries, which is a cloud and cloud security service provider to the enterprise segment.

It also encompasses Decipher Works, Vortiv’s business which acts as a cybersecurity service provider specialising in identity and access management.

Under the terms of the agreement, CyberCX has agreed to pay $25 million for both Cloudten and Decipher.

However, the deal is subject to a number of conditions, including gaining shareholder approval and having the Foreign Investment Review Board (FIRB) sign off.

Vortiv also wants to ensure key staff and customers for both businesses are retained and no material adverse changes occur after the deal is complete.

VOR’s Chairman Gary Foster said this deal will benefit everyone involved.

“Vortiv’s active management of the two businesses, which were acquired over the last 3 years, has greatly assisted in achieving organic growth of more than 30 per cent p.a. and generating a significant return on investment of 196 per cent, through pure hard work and sticking to our formula,” he said.

“We are pleased to support the transition of the business to new owners who are well placed to continue supporting the clients for many years to come,” Gary concluded.

Once the deal is completed, Vortiv has announced it will return $20 million of the $25 million in proceeds to shareholders in the form of a limited, equal-access share buyback.

Shareholders can apply for as many shares as they currently hold, while any shortfall shares will be bought back by VOR and cancelled.

The company has also flagged further investments in the Australian tech industry, though no deals are currently ready to be announced.

Following today’s sale update, shares in Vortiv have been trading down 18.9 per cent worth 15 cents each at 12:03 pm AEDT.

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