Identiv, Inc. (NASDAQ:INVE), a company specializing in computer peripheral equipment, announced today the completion of a significant transaction involving the sale of its physical security business. On September 6, 2024, Identiv completed the divestiture of its physical security, access card, and identity reader operations, including Identiv Private Limited, to Hawk Acquisition, Inc., a subsidiary of the French security solutions provider Vitaprotech SAS.
The sale netted Identiv approximately $144.2 million in cash, subject to customary adjustments. This strategic move follows the agreement initially disclosed on April 2, 2024, with the final terms amended on the day of the closing.
Concurrent with the sale, Identiv's board of directors saw a major change in leadership. Steven Humphreys, the former CEO, resigned from his executive role and the board as of September 6, 2024. Prior to his departure, Humphreys received 365,000 fully vested restricted stock units (RSUs) under the company's 2011 Incentive Compensation Plan, according to his amended employment agreement from October 4, 2023. Similarly, Justin Scarpulla, CFO of Identiv, was awarded 65,000 fully vested RSUs.
The board appointed Kirsten Newquist as the new CEO and a Class I director, effective immediately following the asset sale closure. Newquist, who joined Identiv as President of IoT Solutions on April 15, 2024, brings a wealth of experience from her previous roles at Avery Dennison Corporation (NYSE:AVY) and other companies.
This executive transition and asset divestiture are part of Identiv's strategic realignment. The company's unaudited pro forma condensed consolidated financial information as of June 30, 2024, and for the six months ended June 30, 2024, and the year ended December 31, 2023, provides further details on the financial implications of these changes.
In other recent news, Identiv, Inc. has been making significant strides in its business operations. The company recently finalized a major asset sale to Vitaprotech, receiving approximately $144.2 million in cash. This development coincides with the appointment of a new CEO, Kirsten Newquist, who will lead Identiv's efforts to expand its Internet of Things (IoT) solutions.
Lake Street Capital Markets has also maintained a Buy rating on Identiv, acknowledging the company's strategic approach to expanding its IoT business and the potential financial benefits from the sale of its Premises business. The firm has chosen to withhold adjustments to their estimates for Identiv until the completion of the Premises business sale.
Identiv has also reported its Q2 2024 financial results, exceeding consensus estimates for total company revenues, despite a decrease in its IoT business revenue and a widened GAAP net loss of $6.9 million. In response to these results, Identiv is transitioning RFID production from Singapore to Thailand as part of its growth strategy.
In terms of future plans, analysts from Imperial Capital LLC note that Identiv is exploring strategic options such as mergers and acquisitions for growth, aiming for a non-GAAP gross margin target of 30% or more for its IoT business. These are recent developments in Identiv's strategic and financial journey.
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