US tech giant Cisco is buying the small Norwegian software company Working Group Two, in which Telenor owns nearly half of the shares.
The second working group was set up as a development project at Telenor, and was spun off from the group in 2017. The purchase price is $150 million, or about 1.5 billion kronor.
Whether Telenor will subsequently be able to book a profit of nearly NOK 700 million remains to be seen when Telenor delivers its next quarterly numbers.
– This is a testament to what Telenor’s investment arm, Telenor Amp, can stand for, says Telenor CEO Dan Ouchterlony.
He will not disclose the amount of Telenor’s investment in the software company during the six years that the second business group went from five to 90 employees. Recently, the company has been looking for more outside investors, and in this regard, Cisco has expressed interest, according to Ouchterlony.
CEO Dan Ouchterlony at Telenor. (Photo: Elaine Holland)
– The second business group has gained customers all over the world, and now is the time to further develop the company. Ouchterlony says Cisco is probably the world’s largest internet technology company.
Several new projects
Telenor has pooled group investments in new business areas in subsidiary Telenor Amp, this previously includes wholly owned companies such as Telenor Satellite, IoT provider Connexion, Telenor Maritime, software company Linx, technology company Bldng.ai and infrastructure company Norkring Belgi.
In addition, Telenor has included its partially owned companies in subsidiary Amp, companies that the telecom giant believes have strong growth potential and where Telenor will be able to make a difference as an owner.
When startup Shapemaker raised NOK 27 million in additional equity in July, Telenor was among the investors. Telenor itself believes that investments in a total of 16 companies could be valued between NOK 10 and 15 billion.
When asked if Telenor isn’t now selling the technology company too early, Ouchterlony replied:
Telenor makes constant assessments of which investments we should hold, and here Cisco came up with a good offer and opportunity that we wanted to take advantage of.
The second working group was created as a project in Telenor, but Digital Alpha entered as a co-owner already in 2017 and, as Telenor, owns about 45 percent of the company. The rest is owned by the employees. Digital Alpha is an investment firm within Digital Infrastructure, and has close collaboration with Cisco.
– Diamond is definitely not cut yet, and although the second working group has world-class potential, you have to ask yourself if you are the best diamond cutter. Ouchterlony says that will be to some extent when Salzburg and Dortmund sell Erling Braut Haaland.
also lost
When Cisco is now choosing the second workgroup, it’s at a relatively new price point. The company ran an increasingly large deficit from 2017 to 2021, the most recent financial statement available. In 2021, the deficit ended at around NOK 80 million, while the income amounted to NOK 18 million.
In the fall of 2020, DN discussed selling Tapad, which Telenor had bought four years earlier for NOK 3.2 billion. The sale resulted in a loss of 700 million to the telecom group.
In the second quarter, Telenor Amp reported turnover of just over NOK 1.2 billion, which is an increase of 5.3 percent over the corresponding quarter last year. By comparison, Telenor’s turnover is just over five billion kroner in Norway, and kroner 20.2 billion in total in the group.(conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We’d like you to share our statuses using links that lead directly to our pages. Reproduction or other use of all or part of the Content may be made only with written permission or as permitted by law. For more terms see here.
“Web specialist. Lifelong zombie maven. Coffee ninja. Hipster-friendly analyst.”
