Concurrent Sells Real-Time Business Segment to Battery Ventures for $35M

5/15/17

ATLANTA, May 15, 2017 (GLOBE NEWSWIRE) -- Concurrent Computer Corporation (NASDAQ:CCUR) has sold its Real-Time business segment to technology-focused investment firm Battery Ventures for gross proceeds of $35 million cash, subject to customary post-closing adjustments and indemnification obligations. The Real-Time business segment will operate as an independent, privately-held company doing business as Concurrent Real-Time, Inc. Concurrent Computer Corporation will focus its continuing operations on accelerating the growth of its existing video storage and delivery business, which addresses what industry analysts have estimated is currently a $3.7 billion a year market opportunity expected to grow 10% annually.

Concurrent is already an established leader in the video content delivery market and in 2015 launched the Aquari™ open-architecture video storage solution to meet the needs of current and potential customers impacted by the explosion of video content. Industry analysts project that by 2020, video will account for 79% of all global Internet traffic.

“Our business plan for Concurrent is now dedicated to expanding our leadership position in storage, protection, transformation, and delivery of high-value video assets,” said Derek Elder, President and CEO of Concurrent. “We will accomplish this through a combination of focus, differentiated solutions, and the stability of a strong balance sheet in a rapidly evolving marketplace.

“We have a solid foundation of blue chip broadcast customers that include many of the world’s leading telecommunications and cable television operators,” Mr. Elder continued. “By expanding our product portfolio through the Aquari platform, we are addressing adjacent, significantly larger market segments. During the first 10 months of our current fiscal year, we have already added nine new video storage customers including two that are existing video content delivery customers.”

Terms of the Agreement

Under terms of the agreement, today Concurrent has closed on the sale of the Real-Time segment’s global operations with the exception of its European operations. The European operations portion of the transaction will close upon approval of the transaction by the French Ministry of the Economy, which is pending. Of the $35.0 million in gross proceeds, $2.8 million is being held by the buyer Battery Ventures until the approval is received. In addition, $2.0 million of the transaction proceeds has been placed into escrow for future release to Concurrent, subject to various terms and conditions, on May 15, 2018. Concurrent recorded expenses of $1.1 million related to the transaction for the third quarter ended March 31, 2017.

Concurrent is reporting results for the third quarter ended March 31, 2017 today. Total revenue for the third quarter was $15.0 million. Revenue from the Content Delivery business segment (which includes the Aquari storage solution) was $7.5 million, which compares to $8.2 million for the third quarter of fiscal 2016, and trailing 12-month revenue from this segment totaled $28.6 million. Trailing 12-month revenue from the Real-Time business segment was $32.5 million. The Real-Time business segment will be classified as discontinued operations beginning in the fourth quarter of fiscal 2017.

Management believes that as a result of the Real-Time business segment sale, the pro forma working capital position of the Company has increased by approximately $30 million and the Board of Directors has initiated a process to evaluate strategies to maximize shareholder returns.

In connection with the closing of the transaction, the special banking committee of the Company’s board of directors that was formed to direct the work of its investment banking advisors and review the Company’s strategic alternatives has been dissolved.

Sutherland Named CFO

As part of a planned transition, Warren Sutherland has been named Chief Financial Officer of Concurrent. Mr. Sutherland previously served as the Company’s Vice President of Sales Operations, Information Technology and Financial Planning & Analysis. He has more than 16 years of financial and operational leadership experience with public and private companies in the high-tech and fin-tech industries. He succeeds Emory Berry who is leaving the Company after the Real-Time segment sale to pursue other career opportunities.

Mr. Sutherland held various financial management positions at Concurrent from 2000-2015, including Corporate Controller, and then joined Cardlytics as Vice President of Financial Planning & Analysis for one year before returning to Concurrent in mid-2016. He began his accounting career as an auditor with Arthur Andersen. He is a CPA and holds a Bachelor of Business Administration in Finance and Masters of Accountancy, both from the University of Georgia.

“I want to sincerely thank Emory Berry, who has worked tirelessly to improve the Real-Time operations over the years, and has worked side-by-side with me to maximize the value of Real-Time for our shareholders. His commitment and expertise is deeply appreciated and I wish him the very, very best. In addition, I look forward to working with Warren as Concurrent embarks on a new path of exciting opportunities and sincerely appreciate Emory’s contributions during his tenure with the Company,” said Mr. Elder.

About Concurrent 

Concurrent (NASDAQ:CCUR) is a global software and solutions company that develops advanced applications focused on storing, protecting, transforming, and delivering high value media assets. We serve industries and customers that demand uncompromising performance, reliability and flexibility to gain a competitive edge, drive meaningful growth and confidently deliver best-in-class solutions that enrich the lives of millions of people around the world every day. Offices are located in North America, Europe and Asia. Visit www.concurrent.com for further information and follow us on Twitter: www.twitter.com/Concurrent_CCUR.

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