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- 28 January 2022 16:50
Delta Drone International to sell Parazero for $6 million
Delta Drone International Limited (ASX: DLT) has entered into a binding agreement with a consortium of investors led by NASDAQ-listed Medigus Ltd and facilitated by Israeli venture capital firm L.I.A Pure Capital Ltd to sell ParaZero Technologies Ltd which operates the company’s drone safety business, for A$6 million in cash.
The company said in an update to the market today that the transaction will allow Delta Drone International to focus on becoming one of the leading drone service providers globally through a strengthened balance sheet. Funds from the sale will allow the company to grow more aggressively as it carefully invests in building the team, particularly in sales, marketing and service areas. Any opportunity to make similar investments like the recent Arvista acquisition will also be considered.
Delta Drone International CEO, Christopher Clark said, “ParaZero and its dedicated team were the inspiration for listing the Company on the ASX in 2018 and have been an important part of the company since that time. With the drone services side of our business experiencing rapid growth, we believe now is the time to focus on the drone services business and still retain the opportunity to utilise the ParaZero products and services on a commercial basis. The exposure to ParaZero that we have retained through the transaction will also enable the Company’s shareholders to benefit from the future success of the ParaZero technology.
“For the company, this sale allows us to invest in building our team and to aggressively accelerate growth across all our drone services businesses, with the vision of becoming one of the leading drone service providers in the world.”
Proceeds from the sale will significantly strengthen the Company’s balance sheet with approximately $5.1 million in cash being available at completion (less the net debt in ParaZero being assumed by the Buyers and transaction costs, which together will be approximately $0.45 million) and a further $0.9 million which will be available 12 months from completion (subject to there being no future warranty claims).
There are no regulatory conditions that would prevent completion of the transaction, which is expected to complete in January 2022.