IT company Link Mobility, listed on the Oslo Stock Exchange, announced early Tuesday morning that it had entered into an agreement to sell its subsidiary Message Broadcast in a deal that values the latter at $260 million.
The buyer is an unnamed US PE fund.
As a result of the sale, Link Mobility has postponed its full third quarter report presentation, which was originally scheduled for 06:00 on Tuesday morning.
It’s been less than two years since Link Mobility bought Message Broadcast for $260 million, or about 2.8 billion kroner at today’s exchange rate.
– After an extensive strategic review and an attractive price offer from the buyer, we chose to sell the messaging service. The company operates in the United States. We see that market dynamics and needs have changed in two years, and in a different direction from our core business areas, Thomas Berg, CEO of Link Mobility, wrote in an email to DN.
The stock rose more than 20 percent on the Oslo Stock Exchange on Tuesday.
Improves debt situation
Link Mobility brands itself as a “Communications as a Service” (CPaaS) company, which provides messaging, digital marketing and mobile communications services to a number of companies.
The company is valued at $3.6 billion on the Oslo Stock Exchange, with the stock rising more than 60 percent so far this year.
Jens Rogseth, who helped found the company, is the third-largest owner through his part-owned company Karbon Invest.
Link Mobility wrote in an announcement on Tuesday that the sale would result in a significant improvement in the company’s debt ratio, and that the cash balance available after the sale would be NOK 3.5 billion.
The deal is settled in the form of a cash portion of $220 million (about 2.4 billion kroner at today’s exchange rate), ten million dollars in a “seller’s bond,” i.e. future payments, and $30 million based on Message Broadcast’s expected results. In 2024. The deal will lead to book gains for Link Mobility due to the weaker krone.
The background to the purchase of message Broadcast in 2021 was stated to be the desire for strategic expansion in the fast-growing CPaaS market in the USA. So it didn’t take more than two years before Link cast the papers. In the letter sent on Tuesday morning, the Oslo Stock Exchange-listed company wrote that Message Broadcast’s main source of income is very unpredictable.
This is because the Message Broadcast service is mainly provided to large US energy companies, with both sources of income coming from messaging solutions and emergency notification services. The latter depends on the weather and therefore income also fluctuates, the report says.
– Selling the company provides opportunities to create added value elsewhere, and the deal is completed at a price level that we are very happy with. CEO Berg says the deal is valued at high multiples in a demanding market and provides significant value to the company’s shareholders.
– The sale contributes to increased flexibility and work space, allowing us to consider new acquisitions. We are gaining stronger financial strength and are already in talks with several companies that may be suitable for further growth with them. He continues by saying that there are strong companies that can demonstrate strong customer deliveries and good profits.
The main characters
Link Mobility also announced at the same time that the presentation of the full third quarter report would be postponed by three weeks, as messaging sales would have to be reclassified in the accounts.
However, the company is providing some key numbers on Tuesday morning.
At the highest level, revenue increased 30 percent to NOK 1.59 billion in the third quarter, with currency and high activity within Global Messaging highlighted as drivers. Gross profit increased by 17% to NOK 317 million.
At the end of the second quarter, the company had a cash balance of just over NOK 1 billion and total liabilities of NOK 6.29 billion. The majority of this loan is a five-year bond loan issued in the summer of 2021.
Net debt at the end of the second quarter amounted to NOK 2.9 billion.
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