ASX-listed Commander has sold its Nexon subsidiary back to original owners, Charles and Barry Assaf, just 12 months after acquiring it.
As part of the original transaction, Commander offered Nexon's owners 3.8 million shares worth $2 each, bringing the total transaction cost to $7.6 million. These were due for redemption on April 30.
Under the new arrangement, the convertible notes have been redeemed, with the deferred consideration of about $1.5 million forfeited by the Assaf brothers. Commander said it will also forgive about $1.9 million in inter-company amounts due from Nexon to Commander and pay about $700,000 in tax liabilities on Nexon's behalf.
As a result of the sale, Commander would not have to fund a likely cash outflow of about $9.1 million on April 30, CEO and managing director, Amanda Lacaze, said in a statement. The handover deal was completed on March 28.
Nexon's Charles Assaf said its transition back to private ownership gave the integrator more freedom to be strategic.
"It was a mutual decision. Based on Commander's conditions, we wanted to get certainty back for our customers," he said. "We're lucky - we have been operating independently for the last 12 so we are intact and have the same 65 staff as we did when we first sold the business."
Nexon is a corporate networking and telecommunications reseller focused on the 50-200 seat market. Commander acquired the company in March last year. At the time, former Commander managing director, Adrian Coote, said Nexon was synergistic with its business model and would allow it to expand its services reach. Since then, both Assaf brothers have maintained management roles.
Charles Assaf said Nexon had provided Cisco-based services and solutions to some existing Commander customers such as ING. These relationships would continue.
He ruled out looking for another suitor, and said Nexon was instead pursuing smaller acquisitions in the networking and ISP space, which provided cross-selling opportunities.
"The overall market has changed - Commander is one of many affected," Assaf said.
Nexon is third business unit to be offloaded by Commander as part of its restructure. In February, the integrator sold off its wholesale network division, Unitel, to M2 Telecommunications for about $12.5 million. Commander also sold off its WA-based ICT enterprise business to Empired for $30,000 earlier this year.