Inventis Limited has agreed to sell its Electronic Circuit Designs division for A$2.4 million, while retaining an option to repurchase the business within a year. The move aims to reduce debt and streamline operations ahead of a planned technology-driven growth phase.
- Sale of Electronic Circuit Designs business for A$2.4 million cash
- Net proceeds estimated at A$2.04 million after adjustments
- Buyer ANT Software assumes employee and supplier liabilities
- Inventis retains a call option to repurchase in 12 months with a 10% premium
- Proceeds earmarked for debt reduction and statutory liabilities
Strategic Divestment to Free Capital
Inventis Limited (ASX – IVT) has taken a decisive step to reshape its business by executing a binding agreement to sell its Electronic Circuit Designs (ECD) division to ANT Software for a cash consideration of A$2.4 million, subject to adjustments. The ECD unit, which specialises in elevator control board design, has been a non-core segment contributing over 12% of the group’s unaudited FY25 revenue but delivering a negative financial contribution.
This divestment aligns with Inventis’ broader restructuring strategy aimed at freeing up capital to address pressing financial obligations, including long-term debt and statutory liabilities. The net proceeds from the sale, estimated at A$2.04 million, will be directed towards these priorities, providing the company with improved financial flexibility.
Sale Terms and Conditions
The transaction includes the transfer of all tangible and intangible assets of the ECD business, ranging from inventory and equipment to intellectual property, customer contracts, trademarks, and domain names. ANT Software will assume responsibility for employee entitlements such as annual and long service leave, as well as supplier obligations.
Completion is expected around 25 June 2025, contingent on several conditions including landlord consent for lease assignment, agreement on purchase price adjustments, and key employees accepting employment offers from the purchaser. The Board is also consulting with the ASX to determine if shareholder approval is required under listing rules.
A Call Option for Future Growth
Notably, Inventis has secured a call option allowing it to repurchase the ECD business within 12 months of settlement. The repurchase price would be the original cash purchase price plus a 10% holding charge, less agreed adjustments. This option underscores Inventis’ intention to potentially reintegrate the business once its technology plan is successfully executed, signaling a long-term growth strategy rather than a permanent exit.
This approach reflects a pragmatic balance between immediate financial relief and preserving future strategic opportunities. By temporarily divesting a loss-making unit, Inventis can focus on core operations and debt reduction, while keeping the door open to reclaim the business if market conditions and internal plans align favorably.
Looking Ahead
Investors will be watching closely as Inventis navigates the completion of this sale and the subsequent execution of its technology roadmap. The outcome of the call option negotiations and the company’s ability to reduce debt will be key indicators of its financial health and strategic direction in the coming year.
Bottom Line?
Inventis’ sale of ECD is a calculated move to stabilize finances while keeping growth options open.
Questions in the middle?
- Will Inventis successfully execute its technology plan to justify repurchasing ECD?
- How will the market respond to the company’s debt reduction efforts post-sale?
- What are the terms and likelihood of exercising the call option within 12 months?