Software Circle agrees sale of Printing.com domain

2nd Apr 2024 12:48

(Sharecast News) - Software Circle announced the sale of the domain name Printing.com to JAL Equity, a prominent owner and operator of marketing, printing, signage, and promotion businesses in the US, for $2.27m (£1.8m) on Tuesday.

The AIM-traded firm said the consideration would be satisfied in cash through two instalments, with $0.23m payable on completion and the remaining $2.04m payable on or before 31 July.

It said the proceeds from the sale would be used for potential acquisitions and support the group's working capital requirements.

The domain had been an integral part of Software Circle's Nettl Systems business for two decades, but with evolving trends and the introduction of Nettl eight years ago, many Printing.com partners had transitioned to Nettl, taking advantage of additional features to future-proof their businesses.

As a result, the number of Printing.com partners had decreased over time, leading to the decision to offload the domain name.

For the remaining partners still using the domain, Software Circle said there would be a smooth transition process.

It said conversations had already begun, adding that support would be provided to facilitate the shift.

Most partners were expected to upgrade and become Nettl partners, while those who opted not to could continue using the software platform as white-label partners.

In another update, Software Circle provided insight into the sale of Works Manchester (WML) to Rymack Sign Solutions, initially announced on 19 May 2022.

Following delays in receiving the first instalment of deferred consideration from Rymack, confidence in receiving any further payments had diminished.

Subsequently, the carrying value of the deferred consideration under the sale and purchase agreement was reduced.

With WML filing a notice of intention to appoint administrators in December, the remaining deferred consideration had now been written down, resulting in a net charge.

Additionally, as a guarantor of the lease, Software Circle became liable for unpaid rent arrears and other expenses following WML's administrator vacating the hub in Trafford Park.

The company said it had reached a settlement with the landlord for that liability.

Looking ahead, Software Circle said it remained focussed on its strategy to become a serial acquirer of vertical market software businesses.

Exclusive discussions with two acquisition targets were underway, collectively representing a turnover of about £3m and an adjusted EBITDA of £0.9m.

Further updates on those developments were expected in April.

At 1125 BST, shares in Software Circle were up 6.94% at 19.25p.

Reporting by Josh White for Sharecast.com.