DXN’s $20M edge manufacturing sale falls through

Shalini Lagrutta (DXN CEO)

DXN’s sale of its edge module manufacturing business unit for $20 million to Flow2Edge Australia has fallen through but early talks with other interested parties for its data centre business are taking place.

In September, the pre-fabricated modular data centre specialist announced it would sell the unit to FLOW for $20 million after amending a previous deal in August to sell all of its assets for $26 million.

The September amendment would leave DXN with its data centre business.

Now, DXN has come out via a statement on the Australian Securities Exchange (ASX) to say that the conditions surrounding the sale to FLOW “cannot be satisfied”.

“The announced transaction therefore cannot proceed in its current form and the sale agreement will be terminated,” the statement read.

However, DXN also said it is considering alternative strategic options for the edge business unit, which includes a yet-to-be-determined partnership with FLOW, which may include a license and distribution arrangement.

These discussions are in their early stages, with the specialist adding that “there is no certainty that they will result in a definitive agreement”.

In addition, DXN is gearing up to sell its data centre business, claiming it has received non-binding expressions of interest to acquire the unit, however the business added these discussions are also in their early stages.

DXN’s desire to sell off parts of its business follows a separate announcement in August that its directors intend to "wind up the company". 

The specialist's ongoing acquisition attempts also come after its results for the 2021-22 financial year were released in September and revealed a $6.9 million loss, to which DXN blamed it on the COVID-19 pandemic and the ensuing supply chain chaos.