Disposal of Assets

RNS Number : 9616A

Gresham Computing PLC

19 October 2009

 

Gresham Computing plc

("Gresham" or "the Company")

Disposal of intellectual property and related assets

Gresham Computing plc (LSE: GHT), the specialist provider of real-time financial solutions, today announces the disposal by Gresham Enterprise Storage Inc ("GES"), the Company's US storage subsidiary, of the intellectual property and related assets of its Storage Director business ("Storage Director Assets").

The sale of the Storage Director Assets to Tributary Systems Inc was completed on 16 October 2009.  The disposal will not impact the remaining business of GES, which will continue to operate as normal, focusing on its well established EnterpriseDistributape ("EDT") product.

The fixed consideration for the disposal totals US$1,400,000, payable in cash as follows: US$300,000 at completion, US$300,000 by 31 December 2009, US$600,000 by 30 June 2010 and US$200,000 by 31 December 2010.  There are no performance conditions attached to payment of the deferred element of the fixed consideration.  In addition, contingent cash consideration is payable by the purchaser to Gresham based on a minority share of future sales related to the Storage Director Assets, up to a maximum contingent cash consideration of US$1,800,000 over the five year period from completion. The maximum total cash consideration receivable is therefore US$3,200,000.

The disposal will give rise to cash inflows, net of disposal expenses, of approximately US$500,000 (for 2009) and US$800,000 (for 2010) and further net cash inflows of up to an additional US$1,800,000 in the five years from disposal dependent on the receipt of contingent consideration. The sale proceeds will be used for working capital.  The loss arising on the disposal of the Storage Director Assets is approximately US$1,900,000, based on the fixed cash consideration receivable and discounting completely any contingent consideration that may become receivable based on future events.  The gross assets of the Storage Director Assets as at 30 June 2009 were US$3,200,000, comprising mostly intangible assets.  The Storage Director business generated revenues of US$230,000 for the 6 months to 30 June 2009 and US$250,000 for the year ended 31 December 2008. It is not possible to reliably measure, and therefore disclose, the profit attributable to the Storage Director Assets separately from the GES business as a whole.

Andrew Walton-Green, Gresham CEO, commented:

"EDT is an exceptional solution and will continue to benefit from our dedicated development team based in Austin, Texas. This change will make our storage business highly profitable through a reduction in costs previously associated with Storage Director."

- Ends -

For further information please contact: 

Gresham Computing Plc	[phone]
Andrew Walton-Green, CEO
KBC Peel Hunt	[phone]
Capel Irwin, Daniel Harris

About Gresham Computing plc

Gresham Computing plc is an expert in delivering real-time financial services, specialising in providing banks and their customers with value-added solutions. Founded in 1969, Gresham Computing plc has been listed on the London Stock Exchange (GHT) since 1991 and has offices in Europe, North America and Asia Pacific. Many of the Fortune Global 500 choose Gresham to help improve their competitive edge and bottom line performance in the challenging market sectors of Deposit Acquisition, Real-Time Liquidity, Risk, Cash and Treasury Management, Supply Chain Financing and Electronic Invoicing.

For more information please visit www.gresham-computing.com. 

 

END

 

 

DISVVLFFKBBEFBB