Hyro offloads subsidiaries in $17m deal
Hyro has signed a new deal that sees the Australian digital consultancy sell off the shares it holds in its subsidiaries to US-based video technology and services firm KIT digital for $17 million.
The deal, announced to the Australian Securities Exchange (ASX) this afternoon, involves the sale of four subsidiaries: Hyro Australia Pty Ltd, Idaptive Pty Ltd, Hyro Digital Pty Ltd and the Thailand-registered Hyro Asia Limited.
KIT digital will pay $17.21 million for the four businesses, based on a price of 60 cents per ordinary share in Hyro. The 60 cents per share price represents the highest value that the company's stock has been traded at in the last 12 months, but represents a steep markdown on what the stock was worth pre-global financial crisis, when shares in Hyro traded at prices as high as $30 per share.
KIT digital has the option of paying for the deal either in cash or by issuing over 2.07 million new shares in the company to Hyro.
The deal still needs to be approved by Hyro shareholders.
Hyro's statement pointed out that although the business conducted by the subsidiaries amounted to Hyro's main undertaking, the shareholders would retain ownership and the inherent value of the listed entity, Hyro.
Hyro chairman Rob Clarke said that the sale of the Hyro subsidiaries to KIT digital is a smart move, due to the complementary strategy and offerings of the two companies.
"Both Hyro and KIT digital's service offering in the Asia-Pacific region are strongly complementary, particularly in areas such as video technology, strategy development and user experience," he said today in an announcement.
"KIT digital brings significant experience in video and IP-solutions, which will be of great benefit to existing Hyro clients," Clarke added, while specifying that Hyro will continue to support customers in Asia Pacific post-deal.
Hyro shares are currently trading at 45 cents per share — up 28 per cent on the news. A shareholders meeting to vote on the deal will be called shortly.