Highlights:
Following a comprehensive internal review of the Company’s various operations and assets (ASX: 27 February 2024, 15 April 2024), the Company identified it’s VMware cloud platform assets (“VMware Cloud Assets”) as non-core to it’s strategy of becoming the sovereign provider of choice for SMEs in the Australian defence industry supply chain (ASX: 15 April 2024).
Zettagrid is an Australian owned Technology Aggregator to the IT channel delivering Edge Cloud Hosting, Backup, Disaster Recovery, Software Licensing and Telecommunications in the Asia Pacific region. Zettagrid services more than 300 IT Channel Partners across seven availability zones and was recently named as a Broadcom Premier Partner for the VMware Cloud Service Provider (VCSP) program for Australia, New Zealand, Indonesia and Singapore.
Under the terms of the Agreement, Adisyn will transfer to Zettagrid all customer agreements and contracts (“VMware Customers”) relating to the VMware Cloud Assets which contributed ~$1.018m of revenue for the December 2023 half year period. The Company and Zettagrid have also agreed to novate across all supplier agreements and equipment leases which are required for the operation of the VMware Cloud Assets.
Subject to completion of the transaction, the Company will receive cash consideration of up to $1.4 million in cash (before costs and adjustments), which will be payable into 2 tranches. The first tranche of $850,000 will be payable on the settlement date (“Settlement Date”), which the parties anticipate to be today, 1 May 2024. The second tranche will be payable 9 months from the Settlement Date (“Completion Date”) and is subject to various adjustments determined by the annualised revenue of the VMware Customers at the Completion Date.
The consideration received by the Company will be used towards further implementing the Company’s growth strategy and towards its existing operations. Further details and the material terms of the Agreement are included in the Annexure to this announcement.
As the Company moves towards a capital lite model (ASX: 15 April 2024), Adisyn and Zettagrid have also agreed to enter into a strategic partnership for the sale of new cloud services. The Company will white-label Zettagrid’s Australian cloud services as part of it’s service offering, allowing Adisyn to focus on providing scalable, service-based solutions while substantially decreasing the Company’s requirement for any significant capital expenditure.
Adisyn’s Managing Director, Blake Burton stated: “I’m excited for Adisyn to be partnering with Zettagrid, who are one of the few premier providers of VMware sovereign cloud services in Australia. This sale and partnership allows us to focus our attention on building service-based solutions for defence-linked SME businesses, while still being able to utilise the cloud infrastructure scale which Zettagrid has built over a number of years. Zettagrid are a national cloud provider in Australia, allowing Adisyn to provide local cloud services in almost every state as part of our sovereign IT offering”.
Zettagrid’s CEO, Nathan Harman, stated: “I’m very pleased to be able to announce the acquisition of Adisyn’s VMware cloud infrastructure. Adisyn customers will be able to experience the benefits of the scale and cloud automation that Zettagrid provides, and the transaction provides us with a new cloud availability zone in Darwin. This will expand our sovereign Australian cloud availability zones to six, which encompasses Sydney, Melbourne, Brisbane, Perth, Adelaide and now Darwin. We’re excited to enter into a strategic partnership with Adisyn, which will allow them to focus on their Managed IT and Cybersecurity services whilst being able to leverage Zettagrid cloud infrastructure.”
The Company is continuing an ongoing internal review for the divestments of assets which are deemed to be non-core to the Company’s new strategic focus.
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