Infotrust has agreed to sell its Cloud & Communications segment, Nexgen, to Aussie Broadband for $50 million, marking a decisive pivot towards cyber security. The move prompts withdrawal of FY26 earnings guidance as the company reshapes its future.
- Sale of Nexgen segment to Aussie Broadband for $50 million
- Upfront cash of $44.1 million plus contingent consideration up to $5.9 million
- Strategic shift to focus exclusively on cyber security services
- Withdrawal of FY26 earnings guidance due to changed earnings profile
- Proceeds to reduce debt and fund cyber security acquisitions
Strategic Divestment Marks a New Chapter
Infotrust Ltd has taken a significant step in its transformation by agreeing to sell its Cloud & Communications segment, Nexgen Investment Group, to Aussie Broadband Limited for a total consideration of $50 million based on on-target earnings. This divestment is a clear signal of Infotrust’s commitment to becoming Australia’s leading cyber-first technology provider, focusing its resources and expertise on cyber security and related managed services.
The deal includes an upfront cash payment of $44.1 million, with an additional contingent consideration of up to $5.9 million tied to Nexgen’s future EBITDA performance in FY26 or FY27. Completion remains subject to customary conditions, and Infotrust will support a smooth transition by providing selected IT, finance, and corporate services for 12 months post-sale.
Refocusing on Cyber Security
Nexgen has been a solid contributor to Infotrust’s revenue, generating $44.1 million in FY25 with an underlying EBITDA of $7.7 million. However, the company’s leadership has decided that cloud and communications no longer align with its strategic priorities. Instead, Infotrust is doubling down on cyber security, including managed security services, security operations centres, digital forensics, incident response, and secure managed technology offerings.
This strategic pivot simplifies Infotrust’s business structure and sharpens its focus on higher-margin, recurring revenue streams. The sale proceeds will bolster the balance sheet, reduce net debt, and provide capital to pursue a pipeline of acquisitions aimed at accelerating growth in cyber security capabilities.
Financial Guidance and Future Outlook
Following the divestment announcement, Infotrust has withdrawn its FY26 earnings guidance due to the changed earnings profile. The company plans to reassess and update guidance once the financial impact of the transaction and its acquisition activities are clearer. Managing Director Julian Challingsworth expressed confidence that the transaction marks a pivotal moment in Infotrust’s evolution, enabling it to focus on a cyber-first strategy with a strengthened financial position.
Challingsworth also acknowledged the contributions of Nexgen’s leadership and team, wishing them success as they integrate with Aussie Broadband. Looking ahead, Infotrust is actively negotiating acquisitions expected to offset the EBITDA reduction from the divestment and accelerate its transition to a cyber security-centric business model.
Bottom Line?
Infotrust’s divestment of Nexgen crystallises its cyber security ambitions but leaves investors awaiting clarity on future acquisitions and earnings outlook.
Questions in the middle?
- Which acquisitions are next in Infotrust’s cyber security growth pipeline?
- How will Aussie Broadband integrate Nexgen and what synergies are expected?
- When will Infotrust provide updated FY26 earnings guidance reflecting the new structure?