Tanla Solutions Ltd. acquires Karix Mobile for Rs. 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.

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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 value2 of  340 Crore.
  • GSO will receive a cash payment of  112 Crore. This will be funded from Tanla’s internal accruals. Further GSO will be issued  125 Crore worth of Tanla stock at a price of  56.79 per Equity share. Tanla will take over a Debt of  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  40, subject to SEBI (ICDR) regulations and approval of shareholders.
  • GSO is entitled to pre-emptive rights3 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  540.24 Crore in FY2018.
  • With combined revenues5 of  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 synergies6 of approximately  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.