WithSecure's Strategic Shift: The Sale of Consulting Division
WithSecure Corporation's Strategic Move
WithSecure Corporation has taken a significant step in its corporate strategy by entering into a share purchase agreement to sell its cyber security consulting business to Neqst, a Swedish investment firm. This decision aligns with the ongoing strategic updates introduced by WithSecure, emphasizing a refocused approach to its core operations.
About Neqst and the Acquisition
Neqst is focused exclusively on investments in technology and technology-enabled businesses, positioning them as an ideal partner for WithSecure’s consulting division. The acquisition will involve transferring shares of a newly established cyber security consulting group, ensuring a seamless transition for employees and operations involved in this pivotal business unit.
Impact on Employees
Approximately 250 employees across various regions, including Finland, the United Kingdom, Sweden, Denmark, Singapore, Italy, and the United States, are expected to join Neqst as a result of this transaction. This move not only retains valuable talent but also presents a new opportunity for growth under Neqst's umbrella.
Strategic Statements from Leadership
Antti Koskela, the President and CEO of WithSecure, expressed his satisfaction with the agreement, indicating that this divestment aligns perfectly with the company’s strategy outlined in late 2023. He emphasized the importance of finding a new owner for the consulting business that can develop its strategic capabilities further.
Neqst's Vision
Tobias Edvardsson, future chairman of the consulting business, shared his enthusiasm about integrating WithSecure's team into Neqst’s portfolio. He described the consulting team as exceptional thought leaders servicing some of the largest clients globally, envisioning a growth trajectory supported by expertise and resources under Neqst’s guidance.
Financial Details of the Transaction
The transaction between WithSecure and Neqst is valued at approximately EUR 22.5 million. Notably, 60% of this amount will be paid upfront in fixed cash and debt-free purchase price upon closing, with the remaining 40% contingent upon the consulting division's performance over the next two years. This structure emphasizes Neqst's commitment to ensuring the consulting business thrives post-acquisition.
Accounting Considerations
WithSecure plans to classify its consulting operations as assets held for sale until the closing. The financial results tied to this unit will be deemed discontinued operations, impacting the company’s financial statements for the upcoming periods. Although a financial audit is still pending, WithSecure anticipates documenting an impairment cost of approximately EUR 13 million in the fourth quarter, reflecting the company's commitment to a smooth transition.
Looking Ahead
The acquisition is set to close during the second quarter of the next year, contingent upon meeting customary closing conditions and obtaining necessary regulatory approvals. WithSecure intends to provide shareholders with updated financial statements regarding the fourth quarter shortly after the deal’s anticipated completion.
Contact WithSecure
For additional information regarding this strategic move, stakeholders can reach out to Laura Viita, VP of Controlling and Investor Relations at WithSecure Corporation. Reach her at +358 50 487 1044 or through their investor relations email, ensuring open communication as the company navigates this transition.
Frequently Asked Questions
Why is WithSecure selling its cyber security consulting business?
This sale aligns with WithSecure's strategic updates aimed at refocusing on core operations and maximizing growth opportunities.
What will happen to the employees involved in the consulting business?
Approximately 250 employees will transition to Neqst, continuing their work in a newly established consulting group.
How much is the transaction worth?
The total enterprise value of the transaction is around EUR 22.5 million, with various payment terms including both upfront and performance-based components.
When will the transaction close?
The transaction is expected to be finalized in the second quarter of the upcoming year, pending regulatory approvals.
How will this affect WithSecure's financial statements?
The consulting operations will be classified as discontinued, with an anticipated impairment cost impacting the fourth-quarter results.
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