(Correcting an article published on March 3 to clarify that references are to Castleton's QAD software consultancy business and not to QAD Inc.)
LONDON (Alliance News) - Castleton Technology PLC Monday said it has agreed to sell the trade and certain assets of its business that provided consultancy for QAD software to Glantus Ltd for GBP200,000 in cash, including GBP50,000 deferred for six months.
In a statement, Castleton said it had decided to sell the consultancy business, owned by its Maxima Information Group (MIG), because it would cost it too much to turn it around.
Castleton, known as Redstone PLC before changing its name in November, said MIG's consultancy business for QAD software has been in decline since Santa Barbara, California-based QAD Inc ended MIG's distribution rights in 2012, while the consultancy's remaining customer relationships have been hit in recent months.
"The board have taken the decision to sell the business in order to allow a new management team to invest the time and resources required to return the business to growth," Castleton said in a statement.
Castelton's said the consultancy business being sold made GBP877,000 of revenues in the year to end-March 2013, and a profit before interest, tax and allocation of certain directly attributable overheads and expenses of GBP390,000. Profits were expected to fall in coming periods.
Castleton said the assets transferred to Glantus are carrying a book value of GBP7,000. Castleton will retain software consultancy's existing debtors and creditors.
After the sale, Castleton will retain ownership of MIG. It will use the proceeds of the asset sale to further it strategy of looking for potential acquisitions in the technology sector.
"The board continues to actively consider options to maximise the value of the company including potential acquisitions in line with our stated focus on the technology sector. We believe the consideration received from the disposal reflects a fair return for a people based business that is in decline," Castleton Chief Executive Ian Smith said in a statement.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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