Croma Security Solutions Group PLC (AIM:CSSG) shares jumped 10% higher in early trade Tuesday on news of a conditional agreement to sell its Vigilant Security (Scotland) Limited subsidiary to M&W Security Limited for £6.5mln, along with inter-company balances of £1.07mln.
The sale aligns with Croma's strategy to focus on its higher-margin businesses, Croma Locksmiths and Croma Security Systems. The company said the proceeds from the sale will support the nationwide roll-out of its modern security centers.
Sebastian Morley and Paul Williamson, former directors of Croma, will acquire Vigilant. They stepped down from the Croma board in December 2022 to prepare the bid. The consideration for the disposal represents approximately 91.8% of Croma's market capitalization. The sale is subject to shareholder approval and is expected to be completed on 30 June 2023.
In a statement, Croma CEO Roberto Fiorentino commented: 'We are delighted to be announcing the proposed sale of Vigilant which is a good business but no longer fits with the future of our group. The funds from the sale will accelerate our ability to drive our Locks and Systems business through the rollout of our modern Security Centres.
"Separately, the group has continued to trade well and we have had a strong second half to the year which ends in June 2023 and we expect to report overall trading comfortably ahead of last year."
Around 9.05am, Croma shares were 10.5% higher at 52.50p.