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Tanla Solutions Ltd. acquires Karix Mobile for  340 Crore in a cash and stock transaction from GSO Capital Partners

a Blackstone Company: Combined entity to be India’s leading Enterprise Cloud Communications Company

Key highlights:

  • 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 valueof 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 rightsin 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. 540.2Crore in FY2018.

  • With combined revenuesof 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 synergiesof 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.

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