February 26 (SeeNews) - Bulgarian telecommunications services provider Allterco [BUL:A4L] said on Monday it has signed a term sheet agreement to sell five of its units to Norway's LINK Mobility Group for a total of 8.8 million euro ($10.9 million) in cash and LINK shares.
"In view of the performance of the IoT business and the investor interest towards it, LINK's offer was evaluated as an incredible opportunity to change the group's development strategy," Dimitar Dimitrov, CEO of Allterco, said in a statement.
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The deal includes all shares in Allterco's units in Bulgaria - Teravoice, Tera Communications and Alterpay, as well as its Romania-based subsidiary Teracomm RO and Macedonia-based Tera Communications DOOEL.
With this deal, Allterco is selling its telecommunications operations in Europe and will focus all of its resources in the development of IoT devices, the company said.
The deal is expected to be completed by April 30.
The acquisition is conditional upon a satisfactory result of a due diligence process to be performed by LINK, and upon LINK and the seller agreeing on the terms and conditions of a final share purchase agreement for the consummation of the transaction, containing, inter alia, customary closing conditions, LINK Mobility Group said in a separate statement.
The deal is also subject to approval from the boards of directors of LINK and Allterco.
"This is our second investment in South-Eastern Europe and the fit between Voicecom and the Teracomm Companies [Teravoice, Tera Communications, Alterpay, Teracomm RO and Tera Communications DOOEL] is very good," Arild E. Hustad, CEO of LINK, said.
In October 2017, LINK completed the acquisition of Bulgarian mobile messaging company Voicecom for 3.82 million euro on a cash-free and debt-free basis.
The preliminary price of the deal for the sale of the five units of Allterco was determined by multiplying by coefficient of 5.5 their projected annual EBITDA.
The final price will be determined on a on a cash-free/debt free basis.
One-third of the price will be paid upon the signing of the final agreement, while a further one third will be paid as seller’s credit with quarterly payable 4.75% interest per annum and a maturity date 3 years after closing. The remaining one third will be paid in LINK Mobility Group shares, valued at the share price at close of trading on the Oslo Stock Exchange on the last trading day preceding the signing of the term sheet, which was 139.80 Norwegian crowns per LINK share.
As at 14:10 CET on Monday, Allterco shares traded flat at 2.06 levs on the Bulgarian Stock Exchange.
Oslo-headquartered LINK Mobility Group has offices in Oslo, Bergen, Stockholm, Malmo, Kolding, Riga and Tallinn. In 2015 LINK Mobility reported revenue of 361.4 million Norwegian crowns and adjusted EBITDA of 50.0 million crowns.
($ = 0.8102 euro)