Publicly listed Arq Group has sold its enterprise services division for $35 million to a consortium involving Quadrant Private Equity and members of the division’s management team including Tristan Sternson, Justin Parcell and Cameron Boog.
The $35 million deal will be based on a cash and debt free basis, and also includes rights to the Arq brand.
The transaction is expected to be completed on March 2.
As a result, current small- and medium-sized business (SMB) division leader Brett Fenton will replace Sternson as Arq Group interim CEO.
Sternson, Parcell and Boog came into the Arq fold through the acquisition of InfoReady for $15.4 million in 2016.
The SMB division will be the only remaining business within the group. However, Arq has confirmed it is in discussions with “multiple interested parties” for the unit, which includes customer-facing brands such as WME, NetRegistry, Melbourne IT, WebCentral and Domainz.
In a statement to shareholders, Arq Group said the divestment will allow the company to focus on stringent cost management and value maximising options for the SMB division.
"The sale of the enterprise division represented an important milestone in the strategic review announced in September," the company said.
Arq informed shareholders in October that it had received several purchase offers for both of its enterprise and SMB businesses, and was “testing the market” for a sale.
At the time, it appointed due diligence advisors and prepared a data room for potential buyers while continuing to perform a “cost review program” following a year of tumbling profits and revenue.
“Decoupling enterprise will allow for the team to focus on SMB, enabling it to deliver to its vision of being the most impactful digital marketing partner in Australia, unlocking the growth potential of local small and medium size businesses,” Arq Group chair Andrew Reitzer said.