Buongiorno to acquire iTouch for EUR 141 million
Italy-based mobile entertainment service provider Buongiorno has signed a definitive agreement to acquire 100% of the share capital of South Africa-based mobile entertainment services provider iTouch Ventures. ITouch has offices in 13 countries and distributes its content in 23 countries, having access to over 500 million mobile users through a flexible multi-channel strategy. The company de-listed from the LSE in June 2005 following the acquisition of the company by For-side.com in Japan for GBP 184 million but is now privately owned following a management buyout in February of this year. Current investors in iTouch include Oak Investment Partners with 40 percent of the ordinary shares and Goldman Sachs with 20 percent, as well as the management team.
The value of the transaction is EUR 141 million. Buongiorno will pay EUR 129 million to iTouch shareholders and will absorb the current EUR 12 million of net debt of iTouch. The consideration will be satisfied partly in cash and partly in new Buongiorno shares to be issued to iTouch shareholders in exchange for iTouch shares, pursuant to article 2440 and 2441 of the Italian Civil Code. The cash component, for a total amount of EUR 73.7 million of the total consideration, will be funded by a new loan facility arranged by Banca IMI (Intesa Sanpaolo Group) for a total amount of EUR 115 million. The contribution in kind is to be settled by issuing 15.4 million new shares in Buongiorno (at a share price of EUR 3.59 per share) with a par value of EUR 0.26 each, reserved for the shareholders of iTouch, arising from an increase in share capital to be approved by Buongiorno’s shareholders in an upcoming Extraordinary Shareholders Meeting to be convened for this purpose. The total amount of Buongiorno’s fully diluted outstanding shares post transaction will be 106.2 million as per the Treasury method.
The company will provide further details on the operational and income statement impact of the transaction with respect to its targets for 2007 and long term plan after the closing date. Further details relating to the transaction will be included in the documentation to be made available to the Italian Stock Exchange, Consob and the Shareholders in accordance with Italian laws and regulations. The closing of the acquisition of iTouch by Buongiorno is subject to certain conditions precedent, among which the approval of the dedicated capital increase by the General Shareholders’ meeting of Buongiorno and the absence of material adverse change with respect to the transaction. It is intended that following the closing of the transaction Wayne Pitout will join the Board of Buongiorno as an Executive Director, together with a designee of Oak Investment Partners. Wayne Pitout will be in charge of M&A activities in the new combined entity.
