LONDON (ShareCast) - (ShareCast News) - Mobile location and data intelligence specialist Proxama announced the sale of its digital payments division to private Danish company LHH2 APS on Wednesday, for an initial cash consideration of £1m plus potential deferred consideration of up to £1m over the next 18 months, subject to certain performance conditions.
The AIM-traded firm said the division generated a loss of £0.8m in the year to 31 December 2016, and had net liabilities of £2.4m as at 30 June this year.

As it announced on 17 May, Proxama had previously undertaken a strategic review of the division and concluded that retaining it as a scaled-back operation best maximised value for shareholders.

However, since the conclusion of the strategic review, LHH2 approached Proxama as a potential cash acquirer of the division, which the board considered was in the "best interests" of its shareholders to accept.

The cash funds received from the sale of the division would be used to further strengthen the balance sheet, following the successful placing and open offer in July which generated gross proceeds of £3.1m and resulted in all debt being cleared.

They would also provide further funding for the development of the location sciences business, including investment into its revenue-generating products.

Following the disposal of the division, Proxama's sole focus will be on the location sciences division.

As a result, the board also proposed that the company's name would changes to Location Sciences at the next annual general meeting, which was currently expected to take place no later than June 2018.

"The completion of this transaction concludes the transition to become a location data business," said chairman Kelvin Harrison.

"We are now debt free, have working capital resources, a new executive team, a proposed new name, access to mobile location data via our 4m audience and the know-how to turn that data into revenue generating products.

"As a team, we are entirely focused on scaling this business."

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