LINK Mobility - LINK signs definitive agreement to divest Message Broadcast
Oslo, Norway, 7 November 2023 at 04:30 CET. LINK has today entered into a definitive agreement to divest Message Broadcast to a U.S. based private equity firm (the Buyer). Message Broadcast is divested at an enterprise value of USD 260 million (EUR 243 million), including an earnout of up to USD 30 million, implying a LTM Q3 23 EV / EBITDA multiple of 14.1x. The transaction offers immediate value creation being significantly accretive to LINK's current LTM Q3 23 EV / adjusted EBITDA multiple of 8.9x. It also substantially deleverages the group, reducing leverage as measured by net debt / adjusted EBITDA from 4.0x currently to 1.0x post transaction. Cash on balance sheet post transaction will increase to NOK 3.5 billion.
Message Broadcast mainly serves large US utilities and has two revenue streams, messaging solutions and critical events messaging, the latter being weather dependent with a large degree of revenue variability. After an extensive strategic review and following a bid from the Buyer, LINK has concluded divesting Message Broadcast is an attractive path to maximize shareholder value. Message Broadcast operates in the highly regulated US utilities industry, a niche business with different customer needs compared to LINK's broad enterprise digital messaging business. The divestiture enhances earnings predictability for LINK with stable organic gross profit growth in a transparent European business supported by a strong contract backlog. The transaction creates a new capital structure to fast-track accretive M&A consistent with LINK's proven track record for inorganic growth over the last decade. LINK's global ambitions remain unchanged and the US market a priority.
"We are happy to reach a purchase agreement for Message Broadcast at a highly attractive valuation in a challenging capital market. LINK's new balance sheet reopens sizeable M&A discussions from a diverse pipeline with accretive target multiples. LINK sees significant scope for inorganic EBITDA value creation through multiple arbitrage use of proceeds retaining leverage well below 3.5x adjusted EBITDA", says André Christensen, Chairperson of the Board.
The transaction will be settled with USD 220 million in cash at close, a USD 10 million seller note with a cash interest of 5% p.a. maturing in the summer of 2025 and a USD 30 million cash earnout based on Message Broadcast's 2024 performance. The earnout is linear from USD 7.5 million and increasing with revenue growth. The starting point reflects modest growth expectations, whilst the end point requires growth in-line with historic performance for Message Broadcast.
The agreement is subject to customary closing conditions and expected to close early next year. The transaction will result in a NOK book gain reflecting a favorable USDNOK development.
For further information, please contact
André Christensen, Chairperson of the Board +1-408-893-8409 andre@christensen.ac
Thomas Berge, CEO
+47 41 31 90 28
thomas.berge@linkmobility.com
Tom Rogn, VP Investor Relations
+47 94 85 56 59
tom.rogn@linkmobility.com
About LINK Mobility
LINK is an award-winning, leading global provider of mobile messaging and communications platform as a service (CPaaS) solutions for increased engagement. The company serves enterprise, SME, and government customers. LINK offers a wide range of innovative and scalable mobile solutions, creating valuable digital convergence between businesses and customers, governments and citizens, platforms and users. LINK has 50 thousand customer accounts globally and exchanges more than 18 billion messages a year. LINK is listed on the Oslo Stock Exchange under the ticker LINK. For more information about LINK, please see www.linkmobility.com and follow LINK Mobility on LinkedIn.
This information is considered to be inside information pursuant to the EU Market Abuse Regulation, and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. The stock exchange announcement was published by Tom Rogn, VP Investor Relations, LINK Mobility Group Holding ASA, at the date and time as set out above.