The ink is nearly dry on a deal that will see Powerlan divest its business infrastructure arm in NSW and QLD for significantly less than the traditional market rate.
Powerlan managing director Theo Baker confirmed last week that he was sorting through proposals and would be accepting one or the other within the next 10 days.
Powerlan Business Infrastructure (BI), the box-moving roots from which Powerlan originated, reported revenue of $100 million last year, which with a net profit of around $3.5 million should have attracted a market valuation of between $8 million and $10 million. But, with hardware-centric operations being a bit on the nose', the current offers are rumoured to be less than half that figure, a speculation on which Baker refused to be drawn.
Baker denied suggestions that the BI group has been sitting on the shelf for some time, thereby damaging its perception in the market as a valuable asset. "We've been easing into the sale process over the last three or four months. The previous sale of our data storage business [XSI Technology] took four to six months," he said. "If it sat on the shelf for six to 12 months then I would be more concerned."
Baker said the level of interest has been somewhat surprising with approximately eight different parties submitting serious bids. He is currently pondering the option to "sell the entire operation to one party or to sell each of the [NSW and QLD] offices to two different parties".
There is little sentimentality attached to the sale, according to Baker. "I'm certainly not sorry I won't be selling boxes anymore, we're now a software vendor and BI has become non-core. It served us well in the past and it could serve someone else well now," he said.
Powerlan has divested many of its non-core assets in recent months, including the data storage arm XSI Technology and the Hong Kong branch of its recruitment business. Baker has previously suggested that he may also sell the Australian recruitment business but when pressed on the issue said he "didn't want to talk about that".