High Wire Networks Sells Technology Services Business Assets in All Cash Transaction to Become Pure-Play, AI-Powered Managed Cybersecurity Provider
High Wire Networks (HWNI) has sold its technology enablement services to ServicePoint in an $11.2 million all-cash deal. The company is also planning to sell its Secure Voice (SVC) subsidiary by Q3 2024. These moves aim to streamline High Wire into a pure-play, AI-powered managed cybersecurity provider, focusing on its Overwatch division. The sale proceeds will reduce overall debt by $5 million and improve net shareholders' equity to over $6 million. Overwatch's total contract value (TCV) for Q1 2024 reached $10.4 million, a 104% increase year-over-year, while recurring revenue has increased by 25% annually. High Wire expects to achieve breakeven in the second half of 2024 and aims to double its TCV in the near term. The company has also signed new large-scale partners, enhancing its market position.
- Sale of technology services business for $11.2 million in cash.
- Reduction of overall debt by $5 million, improving shareholder equity to over $6 million.
- 104% year-over-year increase in Overwatch's total contract value to $10.4 million.
- 25% annual increase in Overwatch's recurring revenue to over $5 million.
- Expectation to achieve breakeven in the second half of 2024.
- Signing of new large-scale partners and global system integrators.
- Holding for sale of Secure Voice (SVC), indicating potential further restructuring.
Funds from Divesture to Accelerate Growth and Development of Company’s Award-Winning Overwatch Managed Cybersecurity Business and its Higher Margin Recurring Revenue Streams
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 deal.
In addition, High Wire’s board of directors approved the holding for sale of the company’s VoIP and data network services subsidiary, Secure Voice Corporation (SVC). There is a tentative sales agreement in place for SVC and the company looks to complete the sale before the end of the third quarter.
“The sale of our technology services business and our anticipated divestiture of Secure Voice will provide additional working capital and streamline our operations from three separate segments into a singular, pure play managed cybersecurity company represented by our Overwatch division,” stated High Wire CEO, Mark Porter.
“We are now better positioned to move from ‘defense to offense,’ and begin executing on our inorganic growth strategy without the burden of today’s sky-high cost of capital and the overhang of burdensome financial instruments on our operations and market valuation.”
The transaction is valued at
The debt reduction and increase in cash also resulted in an improvement in net shareholders’ equity on a pro forma basis to more than
For the first quarter of 2024, High Wire reported the total contract value (TCV) for Overwatch reached a record
“Our cybersecurity business, with its long-term, renewing contracts, provides us a more reliable and predictable revenue stream,” added Porter. “Such revenue models also tend to garner higher market valuations that enhance shareholder value.”
Under the more streamlined structure, the company believes it can also better scale and potentially double again the TCV of its managed cybersecurity services over the near term. The company’s pipeline of managed cybersecurity engagements continues to strengthen, with this driven by the signing of several new large-scale partners and global system integrators.
This includes the recent signing of a global OEM partner founded by a world-famous behemoth in technology to which High Wire has begun to provide a Firewall as a Service (FWaaS). High Wire has already migrated more than a dozen end customers to FWaaS under the OEM brand.
“We plan to engage additional global channel partners as well as expand relationships with our existing partners by encouraging them to adopt and market our entire stack of cybersecurity services,” noted High Wire COO, Stephen LaMarche. “Based on our anticipated revenue growth, scalability through automation and reduced corporate overhead, we expect to reach breakeven in the second half of the year.”
The company recently announced the appointment of Edward Vasko, CISSP, as strategic advisor to help accelerate the growth and development of Overwatch. Vasko brings to the effort more than 30 years of experience and entrepreneurial success in the cybersecurity industry, including business formation, driving growth, and leading M&As and exits. He is expected to join the company full time after completing the transition from his current position.
“We anticipate Ed’s vast experience, knowledge and insight with growing cybersecurity businesses and leading M&As will help us expand our Overwatch revenue streams as well as help us identify complementary managed cybersecurity acquisition targets,” added Porter. “Our strengthened capital resources position us well to pursue such opportunities.”
The company’s cybersecurity business continues to ramp up organically. The company was recently awarded a major new contract to deliver High Wire’s Overwatch OT/IoT Security™ for a U.S. health system comprised of more than 25 hospitals and clinics.
Operating at the core of High Wire’s security operation center is Overwatch SOAR™, a proprietary security orchestration, automation and response (SOAR) technology. The unique AI embedded in Overwatch SOAR automatically consolidates alerts from various threat prevention and detection-and-response platforms and processes them with intelligence-based rules that provide enhanced visibility, improved correlation, and faster remediation.
High Wire’s SOAR technology serves as an exponential force multiplier for its dedicated teams of professional security experts, empowering them to deliver the most secure and cost-effective cybersecurity solutions available on the market today.
High Wire offers its Overwatch managed security services exclusively through a global network of managed service providers (MSPs) and managed security service providers (MSSPs) totaling more than 230 worldwide.
Reflecting High Wire’s preferred “go-to” status for these global channel partners, Frost & Sullivan ranked High Wire as a Top 12 Managed Security Service Provider in the Americas in the categories of growth and innovation.
Overwatch addresses a global cybersecurity market that is expected to grow at a
Additional details related to the transaction will be available in a Form 8-K filed by High Wire and accessible on www.sec.gov.
To learn more about High Wire and its award-winning managed cybersecurity, visit HighWireNetworks.com or view the company’s free video series on YouTube.
About High Wire Networks
High Wire Networks, Inc. (OTCQB: HWNI) is a fast-growing, award-winning global provider of managed cybersecurity. Through over 230 channel partners, it delivers trusted managed services for more than 1,100 managed security customers worldwide. End-customers include Fortune 500 companies and many of the nation’s largest government agencies. Its U.S. based 24/7 Network Operations Center and Security Operations Center is located in Chicago.
High Wire was ranked by Frost & Sullivan as a Top 12 Managed Security Service Provider in the Americas for 2023. It was also named to CRN’s MSP 500 and Elite 150 lists of the nation’s top IT managed service providers for 2023 and 2024.
Learn more at HighWireNetworks.com. Follow the company on X, view its extensive video series on YouTube or connect on LinkedIn.
Forward-Looking Statements
The above news release contains forward-looking statements. The statements contained in this document that are not statements of historical fact, including but not limited to, statements identified by the use of terms such as "anticipate," "appear," "believe," "could," "estimate," "expect," "hope," "indicate," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "will," "would," and other variations or negative expressions of these terms, including statements related to expected market trends and the Company's performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These statements are based on assumptions that management believes are reasonable based on currently available information, and include statements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performances and are subject to a wide range of external factors, uncertainties, business risks, and other risks identified in filings made by the company with the Securities and Exchange Commission. Actual results may differ materially from those indicated by such forward-looking statements. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based except as required by applicable law and regulations.
High Wire Contact
Susanna Song
Chief Marketing Officer
High Wire Networks
Tel +1 (952) 974-4000
Email contact
Media Relations
Tim Randall
CMA Media Relations
Tel +1 (949) 432-7572
Email contact
Investor Relations
Ronald Both or Grant Stude
CMA Investor Relations
Tel +1 (949) 432-7557
Email contact
FAQ
What did High Wire Networks sell to ServicePoint?
When does High Wire Networks plan to sell Secure Voice ?
How much debt will High Wire Networks reduce from the recent sale?
What is the expected financial impact of the sales on High Wire Networks?
How has Overwatch's total contract value (TCV) changed in Q1 2024?
