Novatti Group Limited (ASX: NOV), a leading fintech enabling businesses to pay and be paid, has announced the sale of its wholly-owned subsidiary, Emersion Systems Pty Ltd, which operates its Emersion business, to a subsidiary of CGP Equity. The sale price was $500,000. The divestment is part of an ongoing strategic review of all business units and subsidiaries against the company’s long-term financial goals and targets.
The decision to sell Emersion Systems follows a determination that the original rationale for its acquisition had not been met and that it was unlikely to contribute to Novatti’s long-term financial objectives. Novatti aims to refocus its capital and management attention on the Group’s most attractive growth priorities and delivering sustainable returns to shareholders. CGP Equity is expected to guide Emersion through its next phase of growth with their experience in the managed service provider and telecommunications sector.
According to the share purchase agreement, Novatti sold all of its shares in Emersion Systems to Emersion HoldCo Pty Limited, a wholly-owned subsidiary of CGP Equity, for a cash consideration of $500,000. The agreement includes adjustments for staff retention bonuses and the retention of a net cash balance of at least $175,000 in the business for working capital purposes. Post-completion, Novatti will manage the novation of US customer contracts, as the US-based subsidiary was not part of the sale and will be wound up in due course.
Novatti’s strategic review of other business units and investments remains ongoing. The company will continue to explore opportunities to strengthen its core Payments AU/NZ business and deliver on its long-term financial goals. Mark Healy, CEO of Novatti, approved the announcement’s release.
