PERTH: Gumtree Australia Markets Ltd. (ASX: GUM) has signed a binding agreement to sell its capital markets businesses—HotCopper in Australia and Stockhouse in Canada—to ADVFN Ltd. for $6.8 million in cash, the company announced Monday.
The deal, expected to close the same day, will reduce Gumtree’s debt by $4.8 million and generate $2 million in cash before transaction costs. ADVFN, a global financial information provider, will also assume a $1.3 million loan from the Royal Bank of Canada as part of the transaction.
Gumtree Group CEO Tommy Logtenberg said the divestment aligns with the company’s strategy to streamline operations and focus on core strengths in advertising and classifieds.
“We are pleased that the Capital Markets Business will become part of ADVFN, given the strong business fit,” Logtenberg said in a statement. “This move enables us to concentrate our cash resources on new initiatives and strategic relationships.”
The company received 14 expressions of interest following its April 11 announcement of the divestment plan. After reviewing non-binding proposals, the board chose ADVFN based on deal value and anticipated outcomes for stakeholders.
Gumtree said the sale simplifies its corporate profile and improves appeal to investors by narrowing focus to higher-margin marketplace segments.
“The long-term interests of shareholders are better served by supporting the growth potential of the broader Gumtree Group,” said Non-Executive Chairman Bruce Rathie.
As part of the transition, board member Twila Jensen has stepped down.
Gumtree owns additional brands including CarsGuide and Autotrader.