OSLO, Norway--(BUSINESS WIRE)--Introduction
On 16 September 2015, NextGenTel Holding ASA (“NGTH”)(OSE:NGT) and Future Telecom Invest AS (“FTI”) signed an agreement whereby NGTH will acquire 100% of the shares in Kvantel AS (“Kvantel”) from FTI (the “Kvantel Acquisition”).
In addition, on 16 September 2015, NGTH as the purchaser signed a term sheet with FTI and Energy Future Invest AS (“FTI”) as the sellers whereby the parties shall negotiate, on an exclusive basis, with a view of entering into share sale and purchase agreement regarding NGTH's acquisition of 100% of the shares in Kvantel Voice AS (“Kvantel Voice”) (the “Kvantel Voice Acquisition”).
The key terms of the Kvantel Acquisition
- The Kvantel Acquisition will be completed as part of a two-step transaction. FTI, the minority shareholder in Kvantel, will first acquire EFI's shares in Kvantel through having exercised a preemptive right to acquire such shares. Second (and, for all practical purposes, at the same time as the first share sale and purchase between EFI as seller and FTI as buyer), NGTH will acquire all the shares in Kvantel pursuant to a share purchase agreement between FTI as seller and NGTH as buyer.
- Kvantel's wholly-owned subsidiary Kvantel Voice will be distributed to shareholders of Kvantel (i.e. EFI and FTI) (the "Kvantel Voice Distribution") prior to the closing of the Kvantel Acquisition.
- NGTH will pay a fixed purchase price for Kvantel of NOK 71.1 million and, at the completion of the Kvantel Acquisition, settle Kvantel's shareholder debt with a principal amount of NOK 25 million.
- NGTH finances the Kvantel Acquisition by bank debt facilities.
- The Kvantel Acquisition is subject to approval by the Norwegian Competition Authority (Konkurransetilsynet) and is conditional upon NGTH's ability to finance the Kvantel Acquisition as well as certain other customary closing conditions.
- The closing of the Kvantel Acquisition is expected to take place medio October 2015.
Key facts about Kvantel
Kvantel is a leading independent datacom provider in the Norwegian market and delivers high capacity network services (and telephone solutions through the wholly-owned subsidiary Kvantel Voice). Key customer segments are B2B, system integrators and operators. Kvantel is headquartered in Oslo and was spun out of Hafslund Telekom AS in 2009. In 2014, Kvantel generated revenues from the datacom business of approximately NOK 121 million. Kvantel had 45 employees as per 31 August 2015.
The executive management team of Kvantel consists of:
- Terje Gausel, CEO
- Steinar Theigen, CFO/HR
- Ole Jacob Moldestad, Vice President, Head of Research & Development
- Jørn Howlid, CTO
- Steinar Vedeld, Head of Sales
Terje Gausel (CEO) will leave Kvantel prior to the closing of the Kvantel Acquisition.
The board of directors of Kvantel consists of:
- Bjørn Einar Kihl, Chairman
- Tore Schiøtz (shareholder-elected)
- Trond Skjellerud (shareholder-elected
- Thomas Pettersen (shareholder-elected)
- Knut Arne Ruud (elected by the employees)
- Ali Kowkabi (elected by the employees)
Key financial information for Kvantel
|Telephony||57 545||54 113||49 096|
|Datacom||102 234||102 057||120 729|
|Other services||0||520||1 556|
|Revenues||159 779||156 690||171 381|
|CoGS||-82 750||-84 368||-94 442|
|Backbone/node||-8 555||-10 726||-11 606|
|Gross profit||68 474||61 596||65 333|
|Personnel expenses||-35 764||-47 915||-55 055|
|Other opex||-18 337||-19 133||-20 394|
|Total opex||-54 101||-67 048||-75 449|
|EBITDA||14 373||-5 452||-10 116|
|Depreciation||-13 936||-9 505||-11 673|
|EBIT||437||-14 957||-21 789|
|Net financials||-1 573||-223||-1 553|
|EBT||-1 136||-15 180||-23 342|
Note: Historical figures for Kvantel AS include the activities of the voice business which was demerged into Kvantel Voice AS with effect from 1 January 2015.
|(NOK 1,000)||31 December 2014|
|Deferred tax asset||10 188|
|Property, plant & equipment||34 429|
|R&D and licenses||5 555|
|Other non-current assets||114|
|Total non-current assets||50 286|
|Accounts receivable||25 261|
|Other receivables||20 490|
|Cash and cash equivalents||2 454|
|Total current assets||48 205|
|Total assets||98 491|
|Pais-in capital||6 445|
|Total equity||6 445|
|Long term interest-bearing debt||31 120|
|Short term interest-bearing debt||9 078|
|Accounts payable||20 726|
|Public dues||4 649|
|Other short term payables||26 473|
|Totalt short term liabilities||60 926|
|Total liabilities||92 046|
|Total equity and liabilities||98 491|
The key terms of the Kvantel Voice Acquisition
- NGTH will purchase all the shares in Kvantel Voice following the Kvantel Voice Distribution whereby FTI and EFI will be the sellers in respect of the Kvantel Voice Acquisition.
- NGTH values Kvantel Voice at NOK 23 million on an enterprise value basis
- NGTH finances the Kvantel Voice Acquisition by bank debt facilities
- The Kvantel Voice Acquisition is conditional upon: (a) the negotiation and execution of mutually satisfactory definitive transaction agreements, (b) the completion of a customary due diligence satisfactory to NGTH, (c) NGTH's ability to finance the Kvantel Voice Acquisition, and (d) certain other customary closing conditions.
- Expected closing of the Kvantel Voice Acquisition is medio October 2015.
Key facts about Kvantel Voice
Kvantel Voice provides fixed telephone services to wholesale partners, business customers and public administrations, and was spun out of Kvantel by way of a demerger with effect from 1 January 2015. Following the demerger, Kvantel Voice is a wholly-owned subsidiary of Kvantel.
Kvantel Voice has its principal place of business in Oslo. In 2014, Kvantel's telephony business (now demerged into Kvantel Voice) generated revenues of approximately NOK 49 million. Kvantel Voice had 7 employees as per 31 August 2015.
Terje Gausel is Kvantel Voice's CEO. Kvantel Voice's executive management team functions have otherwise been carried out by the executive management team of Kvantel.
The board of directors of Kvantel Voice consists of:
- Terje Gausel, Chairman
- Ole Jacob Moldestad
- Steinar Theigen
Strategic rationale for the acquisitions
The Norwegian telecom market is undergoing rapid changes driven by technological developments and altered communication patters between people. These changes require swift adaptation by the providers of telecommunication services. NGTH has held a leading position within broadband, VoIP, mobile and TV services for a number of years and is looking to expand its products offering to business customers.
The acquisitions of Kvantel and Kvantel Voice fit well with NGTH’s strategy to grow its business in the Norwegian corporate segment, and the entities (NGTH, Kvantel and potentially Kvantel Voice) will, on a combined basis, have significant potential for realizing scale benefits and more cost effective operations.
Further information and contact persons
NGTH will host a press conference related to the transactions, after the Competition Authority's approval of the Kvantel Acquisition and the completion of the transactions.
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