Industry expansion is on the menu at Invigor Group (ASX: IVO), a data analytics company that’s considering a spin-off of its Skyware Service Control (Skyware) platform, a cloud-based logistics and workforce management tool for corporate customers.
In a market update to shareholders, Invigor said that the company is considering “a number of options including a potential spin-off,” of its wholly-owned subsidiary and welcomed a new significant investor.
Last month, Skyware signed a deal with Europe’s largest food retailers, adding that “a contract of greater scope, geography and value is being negotiated,” and recently announced it was working with Microsoft in the retail sector.
The Skyware platform assists companies in managing large workforces spread across multiple locations, departments and business functions. Skyware implements automation, GPS-assistance and real-time analytics which allows its operator to obtain a detailed top-down view of how a company’s workforce is performing.
The functionality offered by Skyware is attracting the attention of large distribution-focused businesses and companies with large administrative functions because of the efficiencies it can potentially offer and the growing difficulty in managing exponentially-growing volumes of data being generated in real-time.
Skyware spin-off in focus
To get the ball rolling on delineating the Skyware brand from its parent company, Invigor has raised $500,000 from a sophisticated investor, including an option to convert the investment into a 5% shareholding at a later date. This figure could also rise to a 10% shareholding in exchange for A$1 million, which effectively values the Skyware business unit at A$10 million.
The investment means Skyware has a significantly stronger capital position with which to develop its technology, while also welcoming its largest individual investor.
The proposed transaction could still fail to proceed at the discretion of both parties, in which case the $500,000 investment will be converted to shares at a value of $0.01 per share.
Invigor plans to hold a shareholder General Meeting on February 27th, 2018, where Invigor directors are expected to refresh the company’s capacity to issue shares and provide a further update regarding the proposed Skyware spin-off.
Active Skyware expansion
Skyware is currently growing its operational footprint across Europe with existing long-term contracts with Daimler, Liberty Global and Deutsche Bahn already agreed.
Today’s news that Invigor is considering a Skyware spin-off is a direct response to growing demand across all industries for sophisticated cloud-based analytics solutions that can handle large data-sets in real-time.
Invigor estimates it can achieve its A$2 million revenue target in this calendar year and expects to see “substantial growth” in the coming years.
According to Invigor, “over A$4 million of new contracts are being pursued in Germany and Skyware is targeting A$50 million of new business opportunity across identified markets in Europe and the Asia Pacific over the next three years.”
“We are currently exploring options to maximise the value of Skyware and to fund its growth in what we believe to be a very lucrative and growing SaaS market. The need to manage remote workforces is becoming more compelling especially with the growth of e-commerce and mobility,” said Gary Cohen, CEO of Invigor Group.
“Case studies have demonstrated very large cost savings for organisations. This investment of up to $1 million in Skyware for a 10% stake will enable the Company to accelerate its plans to unlock the value of this unique business,” he added.