mCloud Technologies Corp. a provider of cloud technology solutions optimizing the performance, reliability and sustainability of energy-intensive assets announced the Company’s special committee, composed of independent members of mCloud’s Board of Directors (the “Special Committee”), in consultation with financial advisor ATB Capital Markets Inc. (“ATB”), approved the process of pursuing the separation of the Company with the intention of maximizing value and facilitating progress on the Company’s exploration of strategic alternatives, originally announced on March 29, 2023 (the Company’s “Strategic Process”).
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This approval from the Special Committee enables the pursuit of a potential transaction involving the sale of mCloud’s broader industrial and commercial business, including assets, certain legal entities, and global strategic agreements attributable to AssetCare for embedded AI-powered sustainability applications while keeping all business activities subject to military, defense, and aerospace regulations in mCloud under its wholly owned subsidiary, NGRAIN (Canada) Corporation (“NGRAIN”).
NGRAIN is an aerospace and defense technology company mCloud acquired in 2018. This structure would enable NGRAIN to remain focused on its highly regulated defense business on a standalone basis and would fully retain the aerospace and defense revenues attributable to its business. These revenues include long-standing, multi-year engagements with high profile customers.
This separation process is expected to enable maximum shareholder value in a potential transaction. Cash proceeds from the asset sale would be used for payment of current obligations of the Company. The Company intends to complete all necessary requirements to maintain compliance with requirements for public listing, including the completion .
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In parallel, the Special Committee continues to investigate other potential transactions involving the entire business, including a sale of mCloud or the recapitalization of the Company. There can be no assurances that any contemplated transaction will be completed or that any successful transaction will result from the Strategic Process. Any potential transaction would remain subject to the satisfaction of certain customary closing conditions, including the receipt of all necessary regulatory and stock exchange approvals, including the approval of the TSX Venture Exchange.
As a general update on the Strategic Process, the Company today indicated it is currently working with various parties interested in the transaction structure announced today. Since the Company has not raised any new capital since its last update on the Strategic Process on May 23, 2023, the Company continues to closely manage its limited financial resources and continues to work closely with stakeholders on its current obligations, including secured creditors, to ensure mCloud remains compliant with approved waivers and extensions from its lenders.
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