Onfolio's Strategic Sale: BWPS WordPress Business for $780,000

Onfolio Holdings Inc. (Nasdaq: ONFO) has made a strategic move by selling its BWPS WordPress business to WebStreet, a micro private equity investment fund, for $780,000 in an all-cash deal. The transaction includes an immediate cash release of $650,000, with $130,000 held back pending final completion of migration. The company expects to record a capital gain of approximately $150,000 from the sale. This move allows Onfolio to focus on its growing B2B agency portfolio and information products business lines, which are now its core businesses.

The BWPS WordPress business generated approximately $360,000 in revenue and $200,000 in unaudited adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the fiscal year ended 12/31/2023. The sale proceeds will be used to strengthen Onfolio's balance sheet, provide working capital, and facilitate additional acquisitions in its core businesses.

Onfolio's CEO, Dominic Wells, commented on the sale, stating, "We decided to sell our BWPS WordPress business so that our management team can focus on our growing B2B agency portfolio, and our information products business lines, which now constitute our core businesses." This strategic decision enables Onfolio to allocate resources more effectively and drive growth in its core business segments.

WebStreet's acquisition of the BWPS WordPress business presents several synergies and growth opportunities. Firstly, the business generated stable cash flows, with $360,000 in revenue and $200,000 in EBITDA in 2023. This acquisition aligns with WebStreet's strategy of investing in profitable online businesses. Secondly, the WordPress market is vast and growing, with a 40% market share in the CMS sector (W3Techs, 2021). By acquiring BWPS, WebStreet gains a foothold in this market, allowing it to leverage existing customer relationships and expand its offerings. Lastly, the all-cash deal for $780,000, with $650,000 released immediately, provides WebStreet with an attractive entry point, enabling it to generate returns while focusing on organic growth.

In conclusion, Onfolio's sale of the BWPS WordPress business is a strategic move that allows the company to focus on its core businesses and strengthen its financial position. WebStreet, on the other hand, gains a stable cash flow-generating asset in a growing market, positioning itself for future growth and returns. As investors, it is essential to monitor the progress of both companies and evaluate their strategic decisions in the context of their respective business models and market conditions.