Greek Operations DivestmentDecember 4, 2012
FOR IMMEDIATE RELEASE
4 December 2012
GLOBO Plc (“Globo” or the “Group”)
Greek Operations Divestment
Globo Plc (LSE AIM: GBO), the international mobile solutions and SaaS provider, is pleased to announce that it has agreed the sale of 51 per cent of its subsidiary Globo Technologies S.A. (GT), comprising all Greek-related e-business software operations, to GT’s management team for a total consideration of €11.2 million.
The management team acquiring the 51 per cent interest consists of a total of seven managers who are independent of the Directors of Globo.
GT operates in Greece and includes the Group’s traditional e-business software, digitisation and software integration businesses that interact with Greek private and public organisations.
Globo Plc’s Chief Executive Officer, Costis Papadimitrakopoulos stated:
“Globo has always been committed to delivering value for its investors. Since our IPO on the AIM Market in December 2007, the Group has substantially developed its international mobile business, which now accounts for the majority of Group profits, whilst continuing to grow its Greek operations. The divestment of GT will allow the Group to focus exclusively on the profitable expansion of its international mobile operations. Retaining an equity interest in the Greek business demonstrates our faith in its prospects and ensures a smooth transition to the acquiring management team.”
Bearing in mind the significant value of Globo’s international mobile business and its position in the Greek market, the objective of this disposal is to enhance the potential of both the international and Greek businesses and maximise value for Globo shareholders.
As reported in previous financial statements, the e-business segment has been shrinking in size and profitability for the past two years due to the weak Greek economy.
For the 9 months ended 30 September 2012, GT made revenue of €8.7 million and profit before tax of €74,000.
The assets being sold include fixed assets, e-business software rights, cash and receivables from customers and debtors from the traditional Greek e-business software and project businesses. GT had net debt of €0.4 million at 30 September 2012.
The total consideration of €11.2 million will be received in accordance with a 4-year installment schedule with €1 million received on completion of the disposal agreement, €0.5 million receivable in 2013, €1.5 million receivable in 2014, €3 million receivable in 2015 and €5.2 million receivable in 2016. Each completed installment will result in the release of share transfer restrictions attributable to GT shares owned by the acquirors. There are no earn out terms.
After the completion of the transaction, the Group will retain an interest of 49 per cent in GT and the further disposal of this stake will be evaluated in due course. GT will be valued at its net asset value attributable to the Group’s interest and will be treated as an investment in the Group’s balance sheet. Going forward, the Group’s reported financial figures will be derived solely from its international operations.
None of the Directors of the Group will be retaining any interest in the divested entity and the Group does not carry any liability against the entity.
All Intellectual Property Rights (IPR), patents and trademarks that relate to the mobile, S.a.a.S and telecom businesses of the Group remain fully owned by the Group and the divested entity has no claims over these.
The transaction will result in a significant reduction in debt, finance leasing, liabilities and debtors originated by the Greek operations. The Group expects that the transaction will have a significant effect in reducing Days Sales Outstanding (“DSO’s”) and will improve the Group’s working capital performance to accelerate free cash flow generation. In addition, the exclusion of assets and liabilities (including debt) from the Group’s balance sheet will provide significant additional visibility to the investor community on the Group’s international operations and financial performance. The transaction is net cash positive for the Group, even before the collection of the proceeds. The receipt of cash under the installment schedule will further enhance the Group’s net cash position.
The proceeds from the transaction will be used to further accelerate the Group’s international expansion in the Mobile application market and other investments, including acquisitions of companies or technology.
The agreement was executed on 3 December 2012.
Costis Papadimitrakopoulos, CEO
Dimitris Gryparis, Finance Director
RBC Capital Markets
(Nominated Adviser and Broker)
Stephen Foss / Pierre Schreuder / Daniel Conti