Cirata: A raise by any other name
When the going gets tough, the tough sell off the family jewels.
Cirata, the shattered earthly remains of former UK SaaS star WANdisco, has just announced it is to sell off its legacy DevOps activities to Cambridge-inspired (and now London-HQ’d) DevOps company, BlueOptima, for a maximum of $3.5m cash (assuming all of Cirata’s DevOps customers go with the flow). The deal should close in the next few weeks.
At a stroke, Cirata ‘recovery’ CEO, Stephen Kelly, has ejected some 40% of the company’s 2024 revenues. There were never any profits.
Kelly didn’t say how many people will transfer (or exit, as the case may be), though the divestment is expected to reduce Cirata’s annualised cost base by some $4m to around $12-13m.
Unlike Cirata, privately held BlueOptima is just about profitable, generating a net income of £320k on turnover of £7.9m last year (to 31st March 2024).
It must be said, this is pretty slim pickings for a SaaS company that’s been in business for nearly twenty years, so I can’t help but think that taking on Cirata’s DevOps activities could do serious damage to BlueOptima’s meagre profits and its £2.4m operating cash flow.
As for Cirata, I was dead right to note that Kelly chose his words carefully in March when he said that Cirata “does not anticipate an FY25 fundraise for working capital”.
A raise by any other name …
