LINK Mobility acquires U.S. based Message Broadcast, LLC continuing global expansion

 

Oslo, 16 June 2021 at 19:30 CEST: Reference is made to the announcement by LINK
Mobility (LINK) on 14 June 2021 regarding a potential acquisition and EUR bond
tap issue. LINK has today entered into a definitive agreement to acquire Message
Broadcast, LLC, a leading provider of mission critical customer engagement
solutions to blue chip enterprise customers in the U.S. The acquisition will
advance LINK's position in the U.S. and significantly contribute to the organic
growth and profitability of the group.

Message Broadcast is headquartered in Newport Beach, California and is 100%
privately owned today. The company offers its proprietary CPaaS platform EONS
(Emergency Outage Notification System) as well as API driven communication for
email, A2P SMS and voice communication. Message Broadcast operates within large
US industry verticals like utilities, health care and financial institutions,
all with mission critical communication needs. The founder led management team
has more than 25 years of industry experience.  The company's deep customer
relationships have driven historical net revenue retention rates of over 150%.

The acquisition will add an estimated NOK 232 million and NOK 143 million to LTM
pro forma 1Q21 gross profit and cash EBITDA respectively. Message Broadcast has
an established track record of delivering outstanding organic growth with sales,
gross profit and EBITDA increasing at a CAGR of 65%, 69% and 123% respectively
between 2018 and 2020 and a proven ability to scale up the business as
demonstrated by an EBITDA margin which has steadily increased to c.55% over the
past two years. The acquisition will be immediately accretive, increasing LINK's
EBITDA margin for 2020 on a combined basis by over +400 basis points. The
acquisition is expected to add an estimated NOK 285 million (c.86% margin) and
NOK 200 million (c.60% margin) to LINK's 2021 gross profit and cash EBITDA
respectively.

"We are very pleased to expand further in the U.S. with Message Broadcast.
Together with Soprano, LINK has now quickly gained a solid foothold in the U.S.
with a broad product offering and a large customer portfolio. The new U.S.
position will accelerate LINK's organic growth and provide a platform for
further acquisitions in a fast-growing and fragmented market", says Guillaume
Van Gaver, CEO of LINK.

"Our acquisition by LINK will enrich our product offering and further strengthen
our strong relationships with U.S. blue chip companies. We are highly motivated
to continue expanding Message Broadcast's position as part of the global LINK
organization", says Bill Joiner, CEO of Message Broadcast.

The transaction values Message Broadcast at an enterprise value of USD 260
million, implying a forecasted 2021 EV/EBITDA multiple of 10.8x. At completion
of the transaction, the purchase price will be settled 74% in cash funded by the
EUR 170 million tap issue completed on 16 June 2021 and 16,755,069 million new
LINK shares to be issued to the sellers at closing. The new shares will be
subject to a 6-month lock-up from closing, however, 34% of the shares will be
released from the lock-up on 1 November 2021 to satisfy tax obligations of the
sellers. The transaction is subject to certain customary conditions to closing.
No US regulatory approvals are expected to be required and the transaction is
expected to close later this month.

In connection with settlement of the transaction, LINK expects to be at a 5.0x
Leverage Ratio consistent with the temporary waiver of the Incurrence Test as
announced in relation to the tap issue. Following the completion of the
announced term sheet to acquire Soprano (if successful), LINK expects the
Leverage Ratio to be approximately 4.2x. Post the transaction, LINK has a strong
cash position of NOK 649 million and expects to see a further de-leveraging down
towards 3.5x at the end of 2021. LINK retains its financial target of net
debt/adjusted EBITDA below 3.5x. The company will hence strive to deleverage
quickly and then maintain a leverage ratio below 3.5x. 

LINK mobility reiterates its 2024 pro forma guidance of NOK 10 billion in
revenue and its mid to long-term target of 20% organic revenue growth. Should
both the Message Broadcast and Soprano transactions close, LINK intends to
increase its adjusted EBITDA margin forward looking statement to reach 18-20% by
2024.


ABG Sundal Collier will arrange for investor and analyst calls following the tap
issue and acquisition. A group presentation will be held June 17 at 12:00 CEST
by Guillaume Van Gaver, CEO and Thomas Berge, CFO. 

To join the presentation, please go to:

https://teams.microsoft.com/dl/launcher/launcher.html?url=%2F_%23%2Fl%2Fmeetup-j
oin%2F19%3Ameeting_YzNlMzgzMzctYzJlYS00NTQxLWJjZTMtYzVjZTViN2IxOWVl%40thread.v2%
2F0%3Fcontext%3D%257b%2522Tid%2522%253a%2522853e8b83-4054-4eb9-8b26-ec6513dd213d
%2522%252c%2522Oid%2522%253a%2522eb68c95b-8414-4df1-9172-6dbd366491e1%2522%257d%
26anon%3Dtrue&type=meetup-join&deeplinkId=8d51929f-f327-4338-b033-b7e1811388fc&d
irectDl=true&msLaunch=true&enableMobilePage=true&suppressPrompt=true


AGP Advokater AS (Norway) and Paul Hastings LLP (US) are acting as legal
counsels to the company in connection with the transaction. 

Kluge Advokatfirma AS (Norway) and Troutman Pepper Hamilton Sanders LLP (US) are
acting as legal counsels to Message Broadcast and Vaquero Capital, LLC is acting
as financial advisor to Message Broadcast in connection with the transaction.


For further information, please contact:

Guillaume Van Gaver, CEO 
+33 6 32 25 91 25 

Thomas Berge, CFO 
+47 41 31 90 28

Tom Rogn, VP Investor Relations 
+47 94 85 56 59
 tom.rogn@linkmobility.com 


About LINK Mobility 

LINK is one of Europe's leading providers 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 40,000 customer accounts globally and exchanges more than 10 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 

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.