Synchronica Plc Proposed Acquisition Of Iseemedia Inc

20th Jul 2010 07:10

TIDMSYNC RNS Number : 5987P Synchronica PLC 20 July 2010 ? 20 July 2010 Synchronica plc ('Synchronica' or 'the Company') Proposed acquisition of iseemedia Inc ('iseemedia'). Agreed takeover is next step towards market leadership in next-generation mobile messaging for emerging markets Highlights: · Synchronica and iseemedia have entered into a definitive agreement, subject to shareholder approval and funding, scheduled to complete by 31st August, 2010. · Synchronica offers to acquire 100% of outstanding iseemedia shares in a friendly take-over tender offer to iseemedia shareholders. · The acquisition will extend Synchronica's contracted addressable market of 40 mobile operators (representing 660m subscribers) by a further 193m from four contracts with large operators in India and South-East Asia, resulting in a total addressable market of 853 million subscribers. · All iseemedia contracts are based on monthly active user fees, accelerating the transition of Synchronica's revenue profile towards recurring revenue streams. · Synchronica plans to integrate iseemedia's advanced document transcoding engine, iseedocs, into Synchronica Mobile Gateway, providing streaming download of Email attachments. · Acquisition of iseemedia's patent portfolio in the context of Email attachment transcoding and streaming will strengthen Synchronica's IPR position. · Synchronica will maintain its listing on AIM and in addition apply for a listing on TSX-V, resulting in a dual listing on both markets and extending Synchronica's shareholder base to tech-savvy investors in the US and Canada. LONDON, UK/ TORONTO, CANADA - 20th July, 2010 - Synchronica plc (AIM: SYNC) and iseemedia (TSX-V: IEE) announced today that they have entered into a definitive agreement (the "Agreement") whereby Synchronica will offer to acquire 100% of the issued and outstanding common shares of iseemedia (the "Common Shares") by way of an all share tender offer (the "Transaction"). Subject to shareholder and regulatory approvals, the companies expect to complete the Transaction no later than 31st August, 2010. Details of the Proposed Transaction · Synchronica expects to issue 311,305,160 ordinary shares at approximately CDN $0.027 to existing iseemedia shareholders, a total consideration of approximately CDN $8.3 million or GBP5.3million. For each Common Share of iseemedia, Synchronica will offer 4.03 Synchronica ordinary shares. · Synchronica will apply for the new shares to be listed on AIM, in London, and for the new and existing shares to be listed on TSX-V, in Toronto. Background Synchronica and iseemedia are currently competing in the sector of mobile Email solutions for operators and share a strong focus on opportunities in emerging markets. Both Synchronica and iseemedia have built businesses by developing, marketing and selling mobile Email solutions targeted specifically at high-growth emerging markets. In these markets, characterised by low PC and fixed-line penetration, mobile phone penetration is soaring. This means that many users in these regions will have their first contact with Internet services via their mobile phone, creating a unique opportunity for mobile operators to establish the mobile phone as the primary access device, and themselves as the value added service provider. Both Synchronica and iseemedia are offering client-less solutions to mobile operators enabling entry-level devices to send and receive Email using Email-to-SMS and WAP industry standards. While iseemedia successfully has focussed on entry-level services, Synchronica's flagship product Mobile Gateway also offers true push Email (IMAP) and synchronisation (SyncML) services for mid-range feature phones and high-end Smartphones including support for both consumer and business messaging systems such as Microsoft Exchange. Further, Mobile Gateway 5 enables mobile connectivity to Social Networking Services (SNS) such as Facebook, Twitter and LinkedIn and enables users to chat on-line using Instant Messaging (IMPS). iseemedia provides a patent-pending document transcoding engine, iseedocs, enabling on-the-fly conversion of office and multimedia documents. Using advanced streaming, iseedocs can dramatically reduce network bandwidth consumption by as much as 90% when downloading Email attachments. Benefits of the Proposed Transaction Synchronica's and iseemedia's proven mobile Email solutions are already deployed by operators in emerging markets and, as a combined entity, are well positioned to win the race to market leadership for next-generation mobile messaging in emerging markets. As of today, Synchronica has more than 40 mobile operators signed up with a combined addressable market of 660 million subscribers, while iseemedia has secured four large operator contracts with a total addressable market of 193 million subscribers. Synchronica and iseemedia expect that the proposed transaction will produce a number of strategic benefits for the combined entity and Synchronica shareholders including: · Enhanced market position in global mobile messaging with a combined addressable market of 853million subscribers. · Complementary technologies, including iseemedia's advanced document transcoding engine, which will enhance Synchronica Mobile Gateway´s Email attachment handling. · Opportunity to up-sell Synchronica's Instant Messaging (IM) and Social Networking Services (SNS) to the four iseemedia contracts with large mobile operators in emerging markets. · Immediate access to two revenues of live deployments with large mobile operators in India, the world's 2nd largest mobile messaging market, with monthly subscription fees that will accelerate the transition of Synchronica's revenue profile to recurring revenue streams. · Expanded investor base and dual listing expected to result in additional liquidity in Synchronica's stock from investors in the US and Canada. Commenting on the proposed transaction, Carsten Brinkschulte, CEO of Synchronica, said: "The proposed acquisition of iseemedia further demonstrates our commitment to shape the future of mobile messaging in emerging markets and is a key step towards a market-leading position for Synchronica in this fast-growing segment. Delivering an enhanced user experience for next-generation mobile messaging on any handset is core to our mission. The proposed transaction perfectly complements our existing competencies, specifically iseemedia's patent-pending document transcoding technology, and the additional contracts with large mobile operators in India, which will accelerate our transition to a sustainable, recurring revenue profile." In its interim report for the six months ended 30th June, 2010 Synchronica demonstrated accelerated market traction and revenue growth to GBP3.43 million (CDN $5.53 million), an increase to 250% of the comparable period in 2009 and 90% of the total revenues in FY '09. In the period, Synchronica announced several contracts with mobile operators, expanding its customer base to more than 40 contracts representing a total addressable market of 660 million subscribers. In the first six months of 2010, Synchronica also launched a major upgrade to its flagship product Mobile Gateway, introduced MessagePhone(TM), a family of low-cost mobile devices, optimized for use with Mobile Gateway and secured three further contracts with device manufacturers to bundle Mobile Gateway. Through its reseller agreements with Brightstar, Nokia Siemens Networks and a top-5 Asian Network Equipment Provider, Synchronica now has established scalable international channels with global reach and local presence. Anthony DeCristofaro, CEO and President of iseemedia, commented: "The proposed transaction with Synchronica will create a fast-growing mobile messaging player that already counts 44 of the world's mobile operators as customers, including some of the largest carriers worldwide. Our combined addressable market of 853 million subscribers provides excellent opportunities for up-selling and fast organic growth. We are confident that the combined reach of iseemedia and Synchronica will accelerate the company's ability to achieve its goal of market leadership in next-generation mobile messaging for emerging markets." Following completion of the acquisition DeCristofaro will join the Synchronica board as a non-executive director. The acquisition is conditional upon inter alia the approval of Synchronica shareholders, an associated fund raising of between approximately GBP1.95 million (CDN $3 million) and GBP4.54 million (CDN $7 million) and the completion of the disposal of a non-core element of iseemedia's business. Northern Securities Inc., the Toronto based Investment bank and advisor to iseemedia, intends to obtain a firm commitment from its parent company, Northern Financial Corporation for the minimum sum required to allow the acquisition to complete. Shareholder Circulars Full details of the offer will be included in the tender offer and take-over bid circular (the "Tender Offer") which will be mailed to iseemedia shareholders shortly and posted on both companies' web sites. The offer will be open for acceptance for at least 35 days following the commencement of the offer and will be subject to acceptance of the offer by holders of at 51% of the outstanding iseemedia shareholders. Synchronica will update shareholders in due course and expects to call a general meeting to be held during the week commencing 16th August, 2010, by way of a (MORE TO FOLLOW) Dow Jones Newswires July 20, 2010 02:10 ET (06:10 GMT)