High Wire Networks Sells Technology Services Business Assets in All Cash Transaction to Become Pure-Play, AI-Powered Managed Cybersecurity Provider

High Wire Networks Sells Technology Services Business Assets in All Cash Transaction to Become Pure-Play, AI-Powered Managed Cybersecurity Provider

High Wire Networks, Inc., a leading global provider of managed cybersecurity, has sold its technology enablement services business to ServicePoint, a leading provider of technology infrastructure services, in an all-cash deal.

In addition, High Wire’s board of directors approved the holding for sale of the company’s VoIP and data network services subsidiary, Secure Voice Corporation (SVC). There is a tentative sales agreement in place for SVC and the company looks to complete the sale before the end of the third quarter.

“The sale of our technology services business and our anticipated divestiture of Secure Voice will provide additional working capital and streamline our operations from three separate segments into a singular, pure play managed cybersecurity company represented by our Overwatch division,” stated High Wire CEO, Mark Porter.

“We are now better positioned to move from ‘defense to offense,’ and begin executing on our inorganic growth strategy without the burden of today’s sky-high cost of capital and the overhang of burdensome financial instruments on our operations and market valuation.”

The transaction is valued at $11.2 million. The proceeds from the transaction will be used to reduce High Wire’s overall debt by approximately $5 million, including eliminating approximately $1.1 million of convertible debentures, a factoring facility, and $3.2 million of notes payable. The company has transitioned its remaining debt of $1.6 million into more favorable terms, allowing more cash to remain on the balance sheet.

The debt reduction and increase in cash also resulted in an improvement in net shareholders’ equity on a pro forma basis to more than $6 million.

For the first quarter of 2024, High Wire reported the total contract value (TCV) for Overwatch reached a record $10.4 million, up 104% from $5.1 million at the end of the same year-ago quarter. Overwatch recurring revenue is currently tracking at more than $5 million on an annualized basis, up by more than 25% compared to the full year of 2023.

“Our cybersecurity business, with its long-term, renewing contracts, provides us a more reliable and predictable revenue stream,” added Porter. “Such revenue models also tend to garner higher market valuations that enhance shareholder value.”

Under the more streamlined structure, the company believes it can also better scale and potentially double again the TCV of its managed cybersecurity services over the near term. The company’s pipeline of managed cybersecurity engagements continues to strengthen, with this driven by the signing of several new large-scale partners and global system integrators.

This includes the recent signing of a global OEM partner founded by a world-famous behemoth in technology to which High Wire has begun to provide a Firewall as a Service (FWaaS). High Wire has already migrated more than a dozen end customers to FWaaS under the OEM brand.

“We plan to engage additional global channel partners as well as expand relationships with our existing partners by encouraging them to adopt and market our entire stack of cybersecurity services,” noted High Wire COO, Stephen LaMarche. “Based on our anticipated revenue growth, scalability through automation and reduced corporate overhead, we expect to reach breakeven in the second half of the year.”

For more such updates follow us on Google News ITsecuritywire News. Please subscribe to our Newsletter for more updates.