Hexagon AB Sells Non-Core Business Assets to Focus on Core Operations

Hexagon AB Announces Strategic Sale of Non-Core Assets

In a significant strategic move, Hexagon AB has recently declared the sale of various non-essential business components within its Safety, Infrastructure & Geospatial (SIG) division. This decision aims to streamline operations and refocus on its core software portfolio, especially its burgeoning public safety segment, in anticipation of the potential spin-off of Octave.

Details of the Sale

The majority of the business assets have been acquired by Bart Associates (BA), which has taken over pivotal components from Hexagon's US Federal operations. This acquisition includes IT services tailored for the US Federal market, geospatial data production services, and the provision of rugged hardware meant to bolster cybersecurity and enhance situational awareness.

Moreover, the transaction also involves the discontinuation of a smaller reseller operation that provided APIs and related services addressing challenges in geospatial positioning and mapping. Crucially, the products sold in these business lines were not available elsewhere within Hexagon, which emphasizes the focused nature of this divestment.

In the preceding fiscal year, the sold segments generated approximately 90 million USD in revenue, in alignment with industry standards for similar service-based enterprises. It is notable that the parties involved in the transaction have agreed to keep the sale price undisclosed. Upon completion, the businesses will be officially separated from Hexagon by the end of July 2025.

Financial Implications

As Hexagon navigates through this transition, they anticipate that expenses associated with non-recurring items connected to the potential spin-off of Octave will total to about 16 million EUR during the second quarter of 2025. This figure underscores the financial complexities tied to the restructuring process.

Previously revealed plans indicate that Octave is expected to evolve into a standalone entity primarily focused on software and SaaS solutions. Pending the required approvals from relevant stakeholders, the board of directors aims to finalize the spin-off and listing process by the first half of 2026.

Moving Forward

Hexagon's decisive actions signify a pivotal moment in its operational strategy. By divesting non-core assets, the company is positioning itself to concentrate on high-growth areas that promise long-term viability and profitability. These targeted efforts reflect a broader trend within the tech industry, where companies are increasingly shifting focus to enhance efficiency and drive innovation in specialized sectors.

As stakeholders await further developments, all eyes are on how these strategic moves will reshape Hexagon's business landscape and deploy its resources more effectively moving forward. Interested parties can obtain further insights by contacting Tom Hull, Head of Investor Relations at Hexagon, and Anton Heikenström, Investor Relations Manager, for more specific inquiries.

This latest announcement from Hexagon reveals a keen understanding of market dynamics and a commitment to improving its operational focus, reflecting the company’s strategic acumen. Such measures not only enhance the company’s value proposition but also solidify its standing in the competitive landscape of software and geospatial services.