BATAVIA, Ill., June 27, 2024 (GLOBE NEWSWIRE) — High Wire Networks, Inc. (OTCQB: HWNI), a leading global provider of managed cybersecurity, has sold its technology enablement services business to ServicePoint, a leading provider of technology infrastructure services, in an all-cash transaction.
Additionally, High Wire’s board of directors has approved the sale of its VoIP and data network services subsidiary, Secure Voice Corporation (SVC). A tentative sale agreement has been signed for SVC, and the company expects to close the sale by the end of the third quarter.
“The sale of our Technology Services business, along with the planned sale of Secure Voice, will provide additional working capital and streamline our business from three separate segments into a single pure-play managed cybersecurity company, led by our Overwatch division,” said Highwire CEO Mark Porter.
“We are now poised to move from ‘defense to offense’ and begin executing on our inorganic growth strategy without the burden of today’s high capital costs and financial instruments that weigh heavily on our business and market valuations.”
The transaction is valued at $11.2 million. Proceeds from the transaction will be used to reduce High Wire’s total debt by approximately $5 million, including approximately $1.1 million of convertible notes, a factoring facility and a reduction in borrowings of $3.2 million. The company has transitioned its remaining debt of $1.6 million to more favorable terms, allowing it to keep more cash on its balance sheet.
Pro forma net shareholders’ equity also improved to more than $6 million, driven by debt reduction and increased cash.
High Wire reported that Overwatch’s total contract value (TCV) reached a record high of $10.4 million in Q1 2024, up 104% from $5.1 million at the end of the same period last year. Overwatch’s recurring revenue is now over $5 million annualized, up more than 25% compared to full-year 2023.
“Our cybersecurity business involves long-term renewable contracts, providing a more reliable and predictable revenue stream,” Porter added. “Such revenue models also tend to command higher market valuations, which enhance shareholder value.”
Under its more streamlined structure, the company believes it can further expand and potentially double its TCV for managed cyber security services in the near future.The company’s pipeline of managed cyber security contracts continues to strengthen with agreements with several new large partners and global systems integrators.
This includes a recent agreement with a global OEM partner established by a world-renowned technology giant where High Wire has begun offering Firewall as a Service (FWaaS) and High Wire has already migrated over a dozen end customers to FWaaS under the OEM brand.
“We plan to expand relationships with existing partners as we encourage adoption and sales of our full stack of cybersecurity services, as well as engage with additional global channel partners,” said Stephen LaMarche, COO of High Wire. “Based on projected revenue growth, scalability through automation, and reduced enterprise overhead, we expect to reach breakeven in the second half of the year.”
The company recently announced the appointment of Edward Basco, CISSP, as a strategic advisor to accelerate Overwatch’s growth and development. Basco brings more than 30 years of cybersecurity industry experience and entrepreneurial success to the effort, including founding businesses, driving growth, and leading M&A and exits. He will join the company full-time after completing his transition from his current role.
“We expect Ed’s extensive experience, knowledge and insight into growing cybersecurity businesses and major M&A will be instrumental in expanding Overwatch’s revenue streams as well as identifying complementary managed cybersecurity acquisition targets,” Porter added. “Our enhanced capital resources position us well to pursue such opportunities.”
The company’s cybersecurity business continues to grow organically: It recently won a major new contract to provide High Wire’s Overwatch OT/IoT Security™ to a U.S. healthcare system of more than 25 hospitals and clinics.
Running at the core of High Wire’s Security Operations Center is Overwatch SOAR™, a proprietary security orchestration, automation, and response (SOAR) technology. Overwatch SOAR’s built-in proprietary AI automatically consolidates alerts from disparate threat prevention and detection and response platforms and processes them with intelligence-based rules to provide greater visibility, improve correlation, and speed remediation.
High Wire’s SOAR technology exponentially empowers our dedicated team of professional security experts to deliver the most secure, cost-effective cybersecurity solutions available on the market today.
High Wire offers Overwatch Managed Security Services exclusively through its global network of more than 230 Managed Service Providers (MSPs) and Managed Security Service Providers (MSSPs) worldwide.
Reflecting High Wire’s status as the “go-to” for these global channel partners, Frost & Sullivan ranked High Wire among the top 12 managed security services providers in the Americas region in the areas of growth and innovation.
Overwatch addresses the global cybersecurity market, which is expected to grow at a CAGR of 13.8% by 2030 to reach $425 billion.
Additional details about the transaction are contained in a Form 8-K filed by High Wire, available at www.sec.gov.
To learn more about High Wire and its award-winning managed cybersecurity, visit HighWireNetworks.com or watch the company’s free video series on YouTube.
About Highwire Networks
High Wire Networks, Inc. (OTCQB: HWNI) is a fast-growing, award-winning global provider of managed cyber security. Through over 230 channel partners, the company delivers reliable managed services to over 1,100 managed security customers worldwide. End customers include Fortune 500 companies and many of the largest U.S. government agencies. The company’s U.S.-based 24/7 Network Operations Center and Security Operations Center are located in Chicago.
High Wire was ranked by Frost & Sullivan as one of the top 12 managed security service providers in the Americas for 2023. The company was also named to CRN’s MSP 500 and Elite 150 lists as the top IT managed services provider in the country for 2023 and 2024.
For more information, visit HighWireNetworks.com, follow the company on X, watch their extensive video series on YouTube, or connect on LinkedIn.
Forward-Looking Statements
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