So Purple sells broadband arm to focus on Wifi
TECHNOLOGY entrepreneur Gavin Wheeldon has struck a deal to sell the broadband part of his latest venture So Purple to AIM-listed group in a £800,000 cash and shares deal.
The deal will generate cash and allow Mr Wheeldon to focus on the firm’s Purple WiFi offering.
So Purple was established in 2012 after Mr Wheeldon, bought and merged five North West development and design businesses. Significant traction within the WiFi market led the management team to decide to focus all efforts in this area and look for a buyer that would benefit from the purchase of the established broadband division, which trades as ADSL24.
Mr Wheeldon said:: “The last six months have shown us that our own strength really lies in developing our position within the social WiFi space, providing cloud-based solutions to businesses with multiple premises both in the UK and internationally
“We are working with hundreds of business customers now and have rolled out trials with some major, multi-unit brands. Our broadband division was no longer a key focus for us but it is a natural fit with Coms PLC. and both parties will benefit from the transaction.”
So Purple will continue to provide broadband as part of a bundled service, where appropriate but the company’s immediate growth opportunity lies within the social WiFi space, with a focus on the leisure, hospitality and retail sectors.
Mr Wheeldon who previously successfully built up and sold Oldham-based translation business ALS to Capital added: “We are looking forward to the continued growth of Purple WiFi, which allows businesses to build brand awareness, attracting new customers to their premises without the need for big marketing budgets or costly time investment.”
The sale of the broadband business, So Purple Tech Limited, includes almost 4,000 broadband customers as well as cloud-based mail and hosting services.
He will receive £50,000 is in cash and £750,000 in Coms ordinary shares of 0.1p each at an agreed price of 1.8p per share.
At 30 June 2012 So Purple Tech Limited had gross assets of circa £40,000 and the ADSL24 network presently generates a monthly gross margin of approximately £20,000 on revenues of circa £75,000.
