Pivot Technology Solutions Inc. T.PTG

Sale of Smart Edge™ to Intel

[scarface9]

TORONTO, Oct. 15, 2019 /CNW/ - Pivot Technology Solutions, Inc. (TSX:PTG.TO - News), ("Pivot", or the "Company"), a full-service information technology provider, is pleased to announce that it has entered into a definitive agreement to sell its Smart Edge^TM  software business to Intel Corporation (NASDAQ:INTC - News), ("Intel") for total consideration of $27 million USD, payable in cash. The transaction is scheduled to close during the fourth quarter of 2019 and is subject to customary closing conditions.   

Pivot's dedicated Smart Edge employees, including Smart Edge CEO Bob Pike, will join Intel's Network and Custom Logic Group (NCLG) when the transaction closes.

"This transaction enhances Intel's ability to address the 5G network transformation with a leading position in edge computing," said Dan Rodriguez, vice president and general manager of the Network Compute Division in Intel's Data Center Group. "We plan to take full advantage of our combined technologies and teams to accelerate the development of the edge computing market while creating a compelling solution for customers."

In connection with the sale of Smart Edge, Pivot and Intel have entered into a three-year preferred channel partner agreement which designates Pivot as a non-exclusive preferred system integrator and channel partner for Smart Edge based solutions. Under this agreement, Pivot will market Smart Edge solutions and provide customers edge services including: deployment, system integration, monitoring and support services.  

"It's been exciting to develop and launch this cutting-edge platform and to witness the enthusiastic response from customers and partners," said Mr. Kevin Shank, CEO. "Pivot remains focused on the vast opportunities at the edge, and with our Intel partnership, we maintain our goal of becoming the #1 edge services provider in North America."   

"Intel is the right company and brand to advance and scale Smart Edge's software solution. Our partnership with Intel will leverage Pivot's core strengths as a technology integrator and service provider with Intel's advanced technology solutions to drive the adoption of the Smart Edge platform," added Mr. Shank. We look forward to collaborating with Intel to develop and take to market many new edge computing use cases."

As a result of the sale, Intel will acquire all of the assets of Smart-Edge.com, an indirect subsidiary of the Company, related to the Smart Edge Business, and will assume certain specified liabilities.

[gil0256]

not sure if i take it as a good news or bad news? for sure it brings $30M CAD cash but i thought smart edge future potential was more than it $30M CAD?

[pumpbuster2011]

In the words of RHCP -- "Give it away, Give it away, Give it away now " At least they signed contract to install / sell for 3 years. Hopefully translates into long term relationship with additional benefits.

[lscfa]

Smart Edge expenses of about $6 mil/yr were built into Pivot SG&A so that should disappear with sale and Pivot will just earn revenues from reselling Smart Edge to end users.   

[Jonaudflo]

The way I see it. It is adding 0,88$ to the share value now VS a maybe more in some years. I like it.

[gil0256]

I agree with you, makes stock price 2x of BV value(which is cheap) plus SP should put some premium of having cash on hand..

[lscfa]

Also, annual cost savings of $6 mil/yr = $0.15/sh.....ebitda multiple of 6 => $0.90/sh increase in value.    

[gil0256]

so are you buying today?

[Jonaudflo]

I am. small 2800 bid at 1.45. Not sure if it will be fill

[risky]

Looks like you will get filled after all, the smart moiney / big spenders are waiting oin the sidelines to see how it goes...not many buyers yet...

[narmac]

,,,,,,there seems to be controlled indifference to the news,,,,,,,,,!!!,, I was of the mind set smart edge would have been worth many more dollars that the $27 mm USD from Intel,,,,,,but then again the fine print in the deal may turn out to be the meat of things to come,,,,,,,,,,,time will tell,,,,,,,,

[sbucksgrande]

Controlled Indifference seems to describe it nicely.  On one hand people (including myself) expected a higher payout from Smart Edge.  On the other hand, it was costing us quite a bit to develop so how much longer did we want to see $5-$6 million in costs on the balance sheet?  With Intel at the helm now the product will develop faster and better, Pivot can start focusing on selling