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Data centre provider DC Two has sold off its “non-strategic” modular business for $3 million to focus on its core offerings after acquiring managed IT and cloud services provider Attained late last year.
The sale was made in December to DComm, A Queensland-based blockchain platform that claims it has invested over $2 million to build a layer 1 blockchain protocol for the “tokenisation of assets”.
Expected to finish by early to mid-Q4 of FY23, DComm’s infrastructure division has a pipeline of renewable energy products worth $3.5 million in WA, with the sale expected to contribute towards this.
“The purchase of DC Two’s modular data centre business is a strategic acquisition which will allow DComm to expand the data centres to this pipeline of renewable energy projects,” said Brett Endersby, CEO of DComm Infrastructure.
According to a statement on the Australian Securities Exchange (ASX), funds from the sale will help it work towards its growth objectives in the cloud microservices sector, which includes assessing “several” merger and acquisition (M&A) growth opportunities.
More specifically, proceeds will go towards sales and marketing, technical product and service development, technical staff salaries and other staffing costs, the paydown of debt secured against its modular assets and general working capital.
In addition to its modular business, DC Two is also transferring its associated customer agreements and contracts, which contributed $1.2 million in revenue for the six months to 31 December 2022, including its $1 million co-location contract with AusMT Energy.
“To date, the AusMT agreement has produced lower than expected revenues and the company has been in ongoing discussions with AusMT with regards to the performance under the agreement,” DC Two claimed.
The planned selling off of its modular business comes more than a month after it announced its first proposed acquisition of a company in the form of Attained, labelling it “critical” to build an offering around its core assets and service offerings.
Shareholder approval has already been given for the Attained deal, with it expected to be completed by the end of March.
“Via these two transactions, the company expects to drive further growth by leveraging its IT infrastructure foundations built over the last three years, from a position of financial strength,” DC Two added.
DC Two's divestment of its modular business comes months after its losses increased by 20 per cent, year-on-year, during FY22, as revealed in its annual financial report back in September.
