Delta Drone International (ASX: DLT) has entered into a binding agreement to sell ParaZero Technologies, which operates the company’s drone safety business for a total consideration of AU$6 million in cash.
The buyers are a consortium of investors led by NASDAQ-listed Medigus Ltd and facilitated by Israeli venture capital firm L.I.A Pure Capital Ltd.
This transaction allows Delta Drone to focus on becoming one of the leading drone service providers globally after its successful acquisition of the Delta Drone South Africa business in December 2020 and the purchase of Arvista Pty Ltd in Australia in September 2021.
Post-sale this will leave the Company with a strengthened balance sheet and a substantially reduced need for cash to fund the ongoing R&D investment that had been required by the ParaZero business, allowing the Company to focus on aggressively growing its global drone services business.
The proceeds from the sale of Parazero Technologies will significantly strengthen the Company’s balance sheet with approximately AU$5.1 million in cash being available at completion and a further AU$0.9 million which will be available 12 months from completion.
These funds will allow the Company to invest in building its team, particularly in its sales, marketing and service areas so that it can deliver its leading drone services to more customers in the mining and agriculture industries, where it is seeing significant growth opportunities.
Commenting on the sale, Delta Drone International CEO, Christopher Clark said: “ParaZero Technologies 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.”