Baltimore backs out of sale process


11 Jul 2003

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Baltimore Technologies is no longer up for sale. Despite a raft of offers, the company has decided that it is in the best interests of shareholders that it continues to operate under the present management, prompting speculation that a management buyout might be in the offing.

The controlled sales process that the firm started in May has been closed. Last week the company sold its SelectAccess division to Hewlett-Packard in a deal valued at £8.3m sterling.

Baltimore said that whilst there have been offer for the whole of the company’s share capital, the board decided that to pursue the offers would not allow maximising the overall return to shareholders. However, the company said, negotiations regarding the disposal of certain managed service related offerings will continue and that it will focus on the authentication business to support its growing customer base.

On an unaudited management accounts basis, Baltimore had £14.47m sterling cash in the bank on 30 June. This balance excludes the £8.3m sterling due from the sale of the SelectAccess business as well as at least £2-3m sterling expected in the next six months from earlier divestments. In effect, the half-year cash balance of £14.47m sterling represents a net reduction of £3.42m sterling for the first six months of 2003. The company said that the business remains debt-free other than a £300k sterling mortgage.

Baltimore’s CEO Bijan Khezri commented: “The software industry continues to represent a significant potential for consolidation worldwide. As the world’s leading PKI-based authentication vendor for high-end applications in finance and government, we will continue carefully monitoring the situation and pursue negotiations regarding the disposal of managed service related offerings.

“Today’s cash balance as well as the expected future inflows will ensure that we continue making the development, support and maintenance of our authentication business a priority,” Khezri said.

By John Kennedy