A VR entertainment company has agreed a $25m deal as it plans to hand shareholders millions.
Greater Manchester-headquartered Immotion Group, which has deals with the likes of The 02, Blackpool Tower and the owner of Alton Towers, has agreed to sell its location-based entertainment business (LBE) to LBE BidCo Inc for $25.2m.
The division includes Immotion Studios, Immotion VR and C.2K Entertainment.
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The group also confirmed it has completed the disposal of Uvisan Ltd for £100,000.
Immotion is to retain its home-based entertainment business (HBE) conducted by Let's Explore Media "following encouraging retail and TV shopping demand".
The group is planning to hand the majority of the LBE sale proceeds to shareholders in a move that could be worth around £13.5m while about £6.5m will be retained for "future opportunities".
In the same update to the London Stock Exchange, the group revealed plans to rebrand its HBE division to Let's Explore Group plc.
A statement said: "Whilst the board believes that considerable growth opportunities are available to the LBE business, it is of the view that as a result of the current and continuing challenges presented by the macroeconomic environment, not least the cost-of-living crisis and inflationary pressures in the US and UK, the trading environment could become much more challenging.
"In addition, to accelerate growth of the LBE business further capital may be required.
"The board is doubtful that debt finance could be secured on acceptable terms and it is unwilling to seek to raise further equity capital at the company's current valuation.
"Accordingly, and in order to minimise risk for shareholders and provide a significant liquidity event in highly uncertain markets, the board has decided to pursue the proposed transaction."
It added: "The Immotion board will seek businesses which have proven products and associated demand but lack capital to grow.
"The board believes that its experience in business acquisition and development in general and its expertise in digital and media marketing, as well as the company's ability to provide cash investment for growth should leave the company well positioned to pursue new opportunities.
"The company has already identified one possible target company which it intends to further explore following completion of the proposed transaction."
After the news was announced, and it also confirmed a new three-year deal with Alton Towers owner Merlin, shares in the group jumped by almost 55% in early trading to 3.4p - there highest since September 2022.
Chief executive Martin Higginson said: "As I'm sure shareholders will understand this transaction has taken time to conclude, and as a consequence we have been unable to update the market for a number of weeks.
"Given the current economic climate we believe this is a good deal for all shareholders, allowing us to not only return cash per share in excess of today's share price, but to go forward with renewed energy, and cash in the plc vehicle.
"Furthermore, with access to capital, this proposed sale will allow the business we started, along with team we created, to grow faster.
"The journey has had a few bumps along the way, not least the Covid pandemic.
"The hardest part of starting any business is the journey through to profitability.
"We have, despite the challenges, achieved this, and now hand over a profitable business for the next stage in its journey.
"With access to capital, this proposed sale, will allow the business we started, along with team we created, to grow faster. It has been my pleasure to have worked with such a talented team, and I wish them and the new owners well.
"I am genuinely excited about the next stage in the company's journey, we have, I believe, got the opportunity to build a highly dynamic trading business, and with a few opportunities already on the horizon, I am looking forward to what the future holds."
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