Link Mobility Group (LINK) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition targets the leading messaging provider in South Africa, expanding presence into a high-growth, underpenetrated region with a strong local and international customer base, aligning with a proven M&A strategy and supporting global expansion beyond Europe.

• SMS is the dominant communication channel in South Africa, offering high penetration and growth potential, especially as email usage is low and the population is young and mobile-first.

• The deal provides entry into a fragmented market with limited competition, high barriers to entry, and low competitive pressure from a few international and smaller local players.

• The business model and technology are highly complementary, with opportunities to introduce advanced CPaaS products and leverage existing investments.

• Acquisition supports expansion into under-penetrated sectors like healthcare, public sector, logistics, e-commerce, and SMEs.

Financial terms and conditions

• Total purchase price up to USD 145 million: USD 100 million upfront cash, USD 15 million in equity (5.9 million shares at NOK 26 per share), and up to USD 30 million in conditional payments over two years based on performance milestones.

• Upfront valuation is 4.6x LTM April 2025 cash EBITDA, rising to 5.8x with full conditional payment, below historical mean multiples.

• SMSPortal generated USD 112 million in revenue and USD 25 million in cash EBITDA (22% margin) over the last 12 months.

• The deal is financed through existing cash reserves, with a 2% increase in shares outstanding; pro-forma leverage ratio increases to 2.0x, within policy range.

• Conditional payment is in two annual tranches, contingent on performance targets.

Synergies and expected cost savings

• Significant upside expected from introducing high-margin CPaaS products, chatbots, and OTT channels (including RCS and WhatsApp) to SMSPortal's customer base.

• Integration of technology platforms is expected to enhance capabilities, unlock efficiency gains, and drive cost synergies.

• Opportunity to expand into underpenetrated sectors and grow SME customer base.

• Additional upside expected from cross-selling advanced solutions to SMSPortal's customer base.

• No public targets for income synergies disclosed; further details to be determined post-closing.