Shares in PipeHawk PLC (AIM:PIP) jumped 68% to 2.69p after the AIM-listed group agreed to sell its Utsi Electronics subsidiary for £1 million in cash, a price well above the unit’s recent asset value.
The company said it had entered into a binding conditional agreement to sell the entire share capital of Utsi Electronics Limited to Leidi Global Supply Limited, a Hong Kong-incorporated buyer.
PipeHawk will receive a £25,000 deposit upfront, with the balance payable on completion. The proceeds will be used to support working capital.
Utsi has been a drag on the group’s finances. As at 30 June 2025, the business had gross assets of about £430,000 and made a loss before tax of roughly £464,000 over the year.
By contrast, the £1 million sale price crystallises value and removes an earnings headwind.
Following the disposal, PipeHawk will focus its remaining operations on Thomson Engineering Design and Adien, its core engineering and specialist technology businesses.
Completion of the transaction is subject to a number of conditions, including approval under the National Security and Investment Act, which allows the UK government to scrutinise certain transactions on security grounds.
As a result, there is no certainty over timing, with a long-stop date set for 28 February 2026.
Investors appeared to welcome both the valuation achieved and the simplification of the group, sending the shares sharply higher in early trading.