Perth-based tech company Velpic has struck a deal to sell its primary business to Damstra Technology for about $3.8 million, weeks after most of its staff were made redundant.
Perth-based tech company Velpic has struck a deal to sell its primary business to Damstra Technology for about $3.8 million, weeks after most of its staff were made redundant.
Under the deal, ASX-listed Velpic will receive a $1 million up-front payment, along with a deferred consideration worth about $2.8 million.
The deal comes after Velpic received an offer in July from tech company Go1 worth $2.4 million, which was three times expected annual revenue.
Go1 had the option to match the new offer, but chose not to.
Velpic's core business is a cloud-based video e-learning platform.
Damstra is a national business operating in the fields of workforce management, compliance, and safety management; its web-based Total Workforce Management System helps clients manage, track and protect their workforce.
Today's news comes one day after Velpic struck a deal to sell its Dash Digital customer contracts for $50,000 to newly established Perth agency CHOOSE Digital.
It also comes shortly after most of its staff were made redundant and managing director Russell Francis stepped down.
Corporate adviser Justin Klintberg, who heads Merchant Group subsidiary Merchant Advisory, along with Merchant Group's CFO Chris Mews, have joined the Velpic board in recent months, indicating they will seek a new direction for the listed entity.
Velpic had $1.9 million in cash at June 30, leaving it well placed to assess new investments.
Velpic experienced strong growth in its share price after listing in 2015, including a 188 per cent increase to 7 cents each on debut, before declining significantly over the past three years to now sit at 0.3 cents per share.
Damstra is purchasing Velpic’s customer contracts, along with all Velpic-related IP and hardware.
Damstra will also sublet Velpic’s Subiaco premises and acquire the Velpic business name.
Velpic said it would hold a general meeting for shareholders, most likely in September, to approve the deal and change the company’s name.
The company said its core staff would continue, while any additional employees needed would be hired on a sub-contract basis.
“The board remains actively seeking new investments opportunities, and also seeking out opportunities for the sale of its other divisions and investments,” Velpic said in a statement to the ASX.
