InterCloud Gains 27%, Company Announces Sale Of Certain Assets For $24 Million
Shares of InterCloud Systems Inc (NASDAQ: ICLD), a nano-cap provider of cloud networking orchestration and automation, surged higher by more than 27 percent early Friday morning after the company announced the sale of its online data backup related business assets to KeepItSafe.
InterCloud noted that it received $24 million in cash for the asset sale, which represented approximately 11 percent of its total annualized revenue. The company added that the asset sale represents the "first step" in its commitment to reorganize the company with a focus on the emerging market of SDN (Software Defined Networking) and VNF (Virtual Network Function) orchestration and automation.
InterCloud also stated that it is considering several options, including strategic investments, partnerships and other opportunities to increase value from its products in the SDN and NFV cloud space.
Mark Munro, CEO of InterCloud, stated, "The sale of these online data backup assets reflects a realignment of InterCloud's strategy. The Board of Directors concluded that the consolidation of "online data backup" companies had begun to produce greater price compression in that market and put pressure on our ability to continue to scale this product set. In addition, this sale has given InterCloud the opportunity to dramatically improve our balance sheet and short-term and long-term liquidity.
"The public markets have been volatile over the past twelve months, and the Board concluded that the sale of these assets and the corresponding increase in liquidity was the prudent decision for InterCloud at this time. Our Board of Directors and senior officers have a significant amount of their own capital invested in InterCloud and continue to believe in our products and market timing for the transition taking place in IT."
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