Tern sells down stake in Device Authority

Internet-of-things technology investor Tern announced the partial sale of its shareholding in Device Authority on Friday.

The AIM-traded company said the sale, amounting to £0.23m, reduced its stake in Device Authority to 30% from 31.7%, before accounting for potential dilution from share options and the anticipated closure of tranche two of Device Authority's fundraising, expected by the end of September.

It said the transaction involved about 5.3% of Tern's holding in Device Authority, and was executed at the same price as the fundraising round announced in December 2023.

The buyer, an independent family office with no prior shareholding in Device Authority, is not affiliated with Tern, the company said.

It added that the proceeds from the sale would go towards further investments in Tern’s portfolio companies and general corporate purposes.

Following the sale, Tern's 30% holding in Device Authority was valued at $5.4m (£4.2m) based on the valuation from the recent fundraising.

On completion of tranche two, which involves an additional $3.3m investment by Ten Eleven Ventures, Tern's stake in Device Authority was expected to reduce further to 25.3%, maintaining an estimated value of $5.4m, pending any share option dilutions.

“Following the failure to pass the resolution required to issue new ordinary shares disapplying statutory pre-emption rights at the recent annual general meeting, the Tern board has been investigating ways to appropriately raise funds to protect Tern's position in, and progress, Tern's portfolio companies, whilst also providing Tern with funding as an AIM company,” said chairman Ian Ritchie.

“The sale of a modest proportion of our holding in Device Authority, at no discount to the value that Device Authority raised funds in December 2023, is, I believe, appropriate to meet the company's immediate requirements.

“We will continue to explore the best way to maximise shareholder value and I look forward to providing updates on our portfolio companies in due course.”

At 1028 BST, shares in Tern were up 1.05% at 1.92p.

Reporting by Josh White for Sharecast.com.