Corero Network Security proposes sale of business systems arm

Corero Network Security has entered into a conditional agreement to sell its holding in subsidiary Corero Business Systems (CBS).The company, which provides security for server targeted attacks that easily bypass firewalls, has proposed the sale of its entire legal and beneficial holding in the business to Civica UK for £13m.The sale amounts to 92% of the issued share capital of CBS. Corero expects that the proceeds of the sale on completion will be approximately £10.9m, net of repayment of bank debt.The group has called a general meeting of the shareholders at the end of the month to approve the sale. Following the disposal, the company will focus on the broader network security market. "The board is pleased with the performance and progress to date of Corero Business Systems division but believes that the sale provides an attractive opportunity to realise its investment in CBS at this time at a compelling valuation, and for a cash consideration," the company said.The sale price represents a multiple in excess of eight times the CBS division's earnings before development costs capitalised, depreciation, amortisation, acquisition and restructuring costs and financing for the year ended December 31st 2012. CBS achieved an annual profit before tax $2.8m last year and had gross assets of $7.0m.RD