Onfolio Holdings Inc. Sells BWPS WordPress Business For $780,000

Rhea-AI Summary

Onfolio Holdings (Nasdaq: ONFO) has sold its BWPS WordPress business to WebStreet, a micro private equity investment fund, for $780,000 in an all-cash deal. The transaction includes an immediate cash release of $650,000, with $130,000 held back pending migration completion. The company expects to record a capital gain of $150,000 from the sale.

The BWPS WordPress business generated approximately $360,000 in revenue and $200,000 in unaudited adjusted EBITDA for fiscal year 2023. CEO Dominic Wells stated the sale will allow management to focus on their growing B2B agency portfolio and information products business lines. The proceeds will be used to strengthen the balance sheet, provide working capital, and facilitate additional acquisitions in core businesses.

Positive

• All-cash deal of $780,000 with immediate access to $650,000
• Expected capital gain of $150,000 from the sale
• Strategic focus on core business lines
• Proceeds to strengthen balance sheet and fund future acquisitions

Negative

• Loss of $360,000 annual revenue stream
• Loss of $200,000 annual EBITDA contribution

Insights

Financial Analyst

The sale of BWPS WordPress business represents a $780,000 cash infusion for Onfolio, with a notable capital gain of $150,000. The 3.9x EBITDA multiple ($780,000 sale price vs $200,000 EBITDA) appears reasonable for a WordPress business. This divestment aligns with strategic focus on B2B agency and information products segments. The immediate cash release of $650,000 strengthens the balance sheet, while the $130,000 holdback ensures smooth transition. Given ONFO's market cap of $7.8M, this transaction is significant, representing approximately 10% of the company's value. The sale's proceeds could fuel strategic acquisitions in core segments, potentially driving higher-margin growth.

Business Strategy Analyst

This strategic divestment demonstrates clear portfolio optimization, shifting from WordPress services to potentially more scalable B2B agency and information product segments. The decision to streamline operations by selling a profitable but non-core asset (55.6% EBITDA margin) shows management's commitment to focus and operational efficiency. The all-cash nature of the deal provides immediate financial flexibility for strategic growth initiatives. The holdback structure (16.7% of total consideration) is a prudent approach to ensure successful business transition. This move could lead to improved operational focus and potentially higher returns from core business segments.

WILMINGTON, Del., Dec. 12, 2024 (GLOBE NEWSWIRE) -- Onfolio Holdings Inc. (Nasdaq: ONFO, ONFOW) (OTC: ONFOP) (the "Company" or "Onfolio"), a company that acquires and manages a diversified portfolio of online businesses, today announced that it has successfully completed the sale of its BWPS WordPress business for $780,000 to WebStreet, a micro private equity investment fund in an all-cash deal, with $650,000 cash released immediately and $130,000 held back pending final completion of migration. The Company expects to record a capital gain of approximately $150,000 from the sale. For the fiscal year ended 12/31/2023, the BWPS WordPress business generated approximately $360,000 in revenue and $200,000 in unaudited adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”).

“We decided to sell our BWPS WordPress business so that our management team can focus on our growing B2B agency portfolio, and our information products business lines, which now constitute our core businesses,” commented Onfolio CEO Dominic Wells, “We plan to use the $780,000 to strengthen our balance sheet, for working capital, and to facilitate additional acquisitions in our core businesses.”

About Onfolio Holdings

Onfolio acquires and manages a diversified portfolio of online businesses. Onfolio acquires business that meet its investment criteria, being that such businesses operate in sectors with long-term growth opportunities, have positive and stable cash flows, face minimal threats of technological or competitive obsolescence and can be managed by our existing team or have strong management teams largely in place. The Company excels at finding acquisition opportunities where the seller has not fully optimized their business, and Onfolio's experience and skillset allows it to add increased value to these existing businesses. Visit www.onfolio.com for more information.

About WebStreet

Established in 2021, has raised over $50M and acquired 50+ assets, giving passive investors exposure to small and medium profitable online businesses. WebStreet partners with world-class operators to acquire and grow SaaS, e-commerce, media, and service-based businesses.

About FE International

The transaction was brokered by FE International. Founded in 2010, FE International is an award-winning strategic advisor for technology businesses. FE’s team has completed over 1,500 transactions with a combined value of over $50 billion. FE International was named one of The Americas’ Fastest Growing Companies from 2020 to 2024 by the Financial Times and is also a four-time Inc. 5000 company.  

Safe Harbor Statement

The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words "may," "will," "should," "plans," "explores," "expects," "anticipates," "continues," "estimates," "projects," "intends," and similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, but are not limited to, general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, delays due to issues with outsourced service providers, those events and factors described by us in Item 1.A "Risk Factors" in our most recent Form 10-K and Form 10-Q; other risks to which our company is subject; other factors beyond the company's control. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Investor Contact

investors@onfolio.com

FAQ

How much did Onfolio Holdings (ONFO) sell its BWPS WordPress business for?

Onfolio Holdings sold its BWPS WordPress business for $780,000 in an all-cash deal to WebStreet, with $650,000 released immediately and $130,000 held back pending migration completion.

What was BWPS WordPress's revenue and EBITDA for fiscal year 2023?

For fiscal year 2023, BWPS WordPress generated approximately $360,000 in revenue and $200,000 in unaudited adjusted EBITDA.

What will Onfolio Holdings (ONFO) do with the proceeds from the BWPS WordPress sale?

Onfolio Holdings plans to use the $780,000 proceeds to strengthen its balance sheet, for working capital, and to facilitate additional acquisitions in its core businesses.

What is the expected capital gain from Onfolio's BWPS WordPress sale?

Onfolio Holdings expects to record a capital gain of approximately $150,000 from the sale of BWPS WordPress.

Why did Onfolio Holdings (ONFO) sell its BWPS WordPress business?

Onfolio sold BWPS WordPress to allow its management team to focus on their growing B2B agency portfolio and information products business lines, which now constitute their core businesses.