LONDON: BATM Advanced Communications Ltd. said Monday it has agreed to sell three non-core business units and a significant block of its own shares in a pair of interconnected deals that will generate about $36.6 million in cash and sharpen the company’s focus on cybersecurity and quantum encryption.
The transactions, with entrepreneur Haim Dor, call for the sale of seven corporate entities for $13.3 million and a secondary offering of 96.8 million existing BATM shares at 18.15 pence each, a 33% premium to the company’s average closing price over the preceding 30 trading days. The share sale will generate about $23.3 million.
Dor, a co-founder of Israel’s Raphael Hospital, will acquire the businesses and shares through entities he controls. Following completion, he will hold approximately 22% of BATM’s issued share capital.
The deals are inter-conditional and require shareholder approval at a general meeting. BATM, which trades on the London Stock Exchange and the Tel Aviv Stock Exchange, said the disposals represent significant progress in its strategy to exit non-core activities.
Streamlined Focus
The move leaves BATM with just one non-core subsidiary — an environmental monitoring company in Hungary that the company expects to divest soon. The remaining operation will concentrate on secure managed networking, quantum encryption and cybersecurity for governments, critical infrastructure providers and global enterprises.
“The transaction will give us the balance sheet strength to embark on the next stage of our strategy,” CEO Moti Nagar said in a statement. “To focus on, and invest in, the significant growth opportunities that exist within the remaining business.”
Financial Terms
Under the sale agreement for the business units, BATM will receive $13.3 million in three equal installments over 24 months. The company will contribute $3.18 million toward existing overdue liabilities of the businesses being sold.
The consideration for the disposed businesses values them at 33 times their adjusted net profit for the year ended Dec. 31, 2025, BATM said.
If Dor sells any of the business units’ shares or assets within two years at a price above a defined threshold, BATM would receive 50% of the difference.
The share sale price of 18.15 pence represents a 13% premium to the value of the shares when BATM received them in a previous non-core disposal, the company said.
Use of Proceeds
BATM said net proceeds will be used to scale its commercial pipeline, accelerate research and development programs, invest in working capital and pursue strategic acquisitions.
The disposals follow five other non-core sales over the past 13 months. Combined with the latest transactions, BATM expects to generate more than $40 million in cash from its divestiture program.
The company provided standard warranties and indemnities to the purchaser and agreed to 24 months of non-compete and non-solicitation obligations related to the disposed businesses.
The transaction remains subject to customary legal and regulatory requirements and the simultaneous completion of both agreements.
