Tanla Solutions (NSE:TANLA, BSE:532790) today signed a definitive share purchase agreement to acquire 100% of Karix Mobile (formerly known as mGage India) and its wholly owned subsidiary Unicel from GSO Capital Partners, a Blackstone Company, at an enterprise value of Rs. 340 Crore.
GSO will receive a cash payment of Rs. 112 Crore. This will be funded from Tanla’s internal accruals. Further GSO will be issued Rs. 125 Crore worth of Tanla stock at a price of Rs. 56.79 per Equity share. Tanla will take over a Debt of Rs. 103 Crore.
On a fully diluted basis, GSO will own approximately 14.6% in Tanla, Promoters 30.6%, Employees 5.6% and Public shareholding 49.2% on completion of the acquisition. GSO will have an observer seat on Tanla’s board.
The Promoters have to subscribe to 7.9 Mn number of shares to retain their pre-acquisition shareholding of 30.6%. The agreed price for subscription to shares is Rs. 40, subject to SEBI (ICDR) regulations and approval of shareholders.
GSO is entitled to pre-emptive rights in future allotment of capital, to enable GSO to avoid dilution.
Karix Mobile an 18-year-old global brand, has offices in four major Indian cities with over 1500 enterprise clients globally, and a revenue of Rs. 540.24 Crore in FY2018.
With combined revenues of Rs. 1170 Crore in FY2018, Tanla will emerge as a leading cloud communications company in India providing formidable digital transformation strategies to its enterprise clients.
Tanla expects cost synergies of approximately Rs. 15 Crore, over the next six quarters of operations.
This acquisition is expected to close by October 2018 and is subject to approval from Tanla’s Shareholders and regulators, if any.