Asure Sells Workspace Management Business For $120mln.

Asure Sells Workspace Management Business For $120mln.
October 9, 2019

 

Shares of Asure Software, Inc. (Nasdaq: ASUR) surged 23.01% or $1.6 to close at $8.34 on Tuesday after the cloud platform enterprise revealed the divestment of its workspace administration business to FM:Systems in a $120 million deal. In the past three months, Asure stock has seen a value erosion of 32.2%, while the S&P 500 (SPX) has lost 1.3%. Interestingly, the trading volume exceeded 12,031,302 shares, which is much higher than the average daily trading volume of 142,000 shares.

The asset and equity deal is anticipated to close in 45-60 days, subject to regulatory approval. The divestment will facilitate Asure to concentrate and advance its award-winning Human Capital Management (HCM) solutions to small and medium-sized enterprises.

The divestment of the Workspace Management business paves the way for both Asure Software and FM:Systems with instantaneous opportunities to concentrate on core strategies and ramp up their corresponding businesses.

FM:Systems offers workplace management technology and solutions that permit facility and real estate teams to ascertain, strategize, and hand over the perfect workplace for every employee.

Commenting on the divestment deal, Asure CEO Pat Goepel said: “This strategic move allows Asure to be laser-focused on our HCM business.”

Goepel believes that the deal will enable the company to fast forward innovation in the payroll and consulting business while providing adequate capital to boost growth and invest in products, employees, and customers.

The company stated that it is rapidly expanding in the HCM domain by empowering small business owners and resellers throughout the country with state-of-the-art workforce solution that simplifies all HR procedures and turns work more captivating.

Goepel further explained the impact of the divestment deal on the company’s capital structure. “This transaction bolsters Asure’s capital structure as we plan to pay down the majority of our debt. It also increases our mix of recurring revenue to over 90%. While we plan to focus on organic growth with the help of upsell and cross-sell initiatives, we will also be in a strong position to pursue accretive acquisitions. Furthermore, the transaction will be attractive from a tax perspective for our shareholders.”

Over the past decade, Asure Software has built its Workspace Management business from $5 million to roughly $28 million in annual revenue, primarily due to the cutting-edge product. Goepel believes that tremendous opportunities exist in the real estate technology market and FM:Systems is best suited to capitalize on Workspace Management solutions while creating their portfolio of space administration technologies.

Commenting on the purchase of Asure’s Workspace Management business, Kurt von Koch, CEO of FM:Systems, said, “We are excited to have reached this agreement with Asure Software. With the addition of Asure’s Workspace solutions, we now have two best in class complementary offerings with technology solutions that enable clients to provide the ideal workplace for every employee. The addition of the Asure workplace management portfolio of products and its employees accelerates our momentum to achieve this goal. We look forward to completing the transaction and ensuring a smooth transition.”

The divestment deal is expected to keep the stock of Asure bullish in the short-term.

The historical price chart indicates that the stock is having firm support at 6.78. The next major resistance is expected only at 15 levels. The Chaikin money flow indicator is also in the positive region. As a result, we can expect the stock to rally further in the short-term.

asu - technical analysis - 9th Oct 2019

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

Ian Maguire

Ian Maguire

Ian is our resident contributor to the latest going ons in the cryptomarket, keeping up to date with the latest icos and coins


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