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LINK Mobility Expanding Globally

Oslo, Norway, 18 May 2021 at 08:15 CEST. LINK Mobility (LINK) has today agreed an exclusive term sheet to acquire Soprano Design, a global CPaaS provider, which will give LINK a truly global footprint in high growth markets with low penetration rates like Asia-Pacific, the U.S. and Latin America. The proposed transaction executes on LINK’s IPO ambition to expand beyond Europe and will add an estimated AUD 109 million (NOK 717 million) and AUD 27 million (NOK 174 million) to 2021 pro forma revenue and cash EBITDA respectively.

Founded in 1994, Soprano Design Ltd. (Soprano) is a global Communication-Platform-as-a-Service (CPaaS) provider headquartered in Sydney, Australia, with regional offices globally. The company has more than 4,000 enterprise and governments customers in various industries within finance, healthcare, logistics and education. Soprano’s services are offered either branded or white-labelled and provide a self-managed, enterprise grade solution to orchestrate interactions over SMS, MMS, email, Voice, RCS, WhatsApp and SecureIP.

Soprano is a high growth, high margin business offering multiple areas of value synergies in combination with LINK: i) cross-sell opportunities for Soprano’s white label Software-as-a-Service (SaaS) solution to Mobile-Network-Operators (MNOs) across the LINK footprint, ii) cross-sell opportunities for LINK across the Soprano footprint, iii) scale advantages for product innovation and go-to-market (GTM) strategies and iv) options to leverage Soprano’s relationships with strong cloud providers. The additional scale and global presence will also contribute to LINK’s ability to improve its cost of goods sold (COGS) as well as obtain infrastructure synergies.

Soprano has historically delivered strong growth and will contribute an estimated AUD 109 million (NOK 717 million) in fiscal year 2021 of annualised revenue to LINK. The proposed acquisition will be accretive to LINK’s margins with forecasted fiscal year 2021 gross profit and cash EBITDA being AUD 58 million (NOK 382 million) and AUD 27 million (NOK 174 million) respectively. Soprano expects continued high organic revenue growth and strong profitability, with gross profit and cash EBITDA growth reported at 18% and 20% respectively for the fiscal year of 2021.

Soprano is currently ~75% privately owned by its founder, Dr Richard Favero, a seasoned industry professional, and ~25% by HT&E Digital Pty Ltd, a publicly listed company in Australia. The agreed term sheet purchase price is NOK 3,590 million and will be settled with 95% in new LINK shares issued to the existing Soprano shareholders and 5% in cash. Richard is highly committed to become a long-term LINK shareholder and will continue to run the Soprano footprint.

“We are enthusiastic to announce our first material expansion outside Europe. Soprano is a fantastic company, and we are excited about working with Richard and his team. With this acquisition, LINK will become a global CPaaS player with broader market positions, products, and organizations. Since the IPO in October last year, we have already added more than NOK 1 billion in annual revenue and improved group margins, and whilst Soprano will add significant growth opportunities, we continue to see near term opportunities in our highly fragmented market that may further position LINK as a global leader within CPaaS”, says Guillaume Van Gaver, CEO of LINK.

“LINK and Soprano are a wonderful combination for our customers and partners. The extended and non-overlapping geographical reach, wider product set, broader expertise and an ever-expanding team of seasoned professionals will lead to an ever-expanding CPaaS capability. The entire Soprano team is excited to work with the LINK team and become a stronger more valuable and meaningful provider to our combined customers”, says Dr Richard Favero PhD, Founder and Executive Chairman of Soprano.

LINK will at closing issue 88,706,339 new shares at a price of NOK 38.65 per share to settle the transaction, with the remaining AUD 25 million (NOK 161.5 million) settled in cash. The term sheet values Soprano at a forecasted fiscal year 2021 EV/cash EBITDA multiple of 19.7x. The agreed valuation reflects Soprano’s position with a rich CPaaS offering, strong geographical footprint and a diversified customer base driving sustained growth and margins.

LINK observes large value creation opportunities for a combined entity within cross-sales of product portfolios, product innovation, operational leverage and COGS synergies to be further advanced in the due diligence process. Soprano operates in populous countries with low penetration rates, creating large growth opportunities for a joint entity with an extensive product offering. Furthermore, Soprano’s presence in the U.S., Latin America and Asia-Pacific offers a beachhead for continuous expansion especially in the U.S. and Latin America where the growth potential and demand for CPaaS solutions are rising strongly. LINK mobility reiterates its 2024 pro forma guidance of NOK 10 billion in revenue and its mid to long-term target of 20% organic revenue growth. Should the transaction close, LINK intends to increase its adjusted EBITDA margin forward looking statement to reach 15-17% by 2024.

The transaction is subject to customary due diligence and conditions for completion, including approval by LINK’s shareholders in an extraordinary general meeting (EGM) to be summoned in due course. At the EGM Abry Partners and Karbon Invest will vote in favour. The transaction is planned to close during the second half of 2021.

The issued shares will be subject to a lock-up period of up to 18-months with a gradual release of 3 million shares per month per shareholder from 6-months after closing of the transaction.

The proposed transaction will be presented today at 10:00 CEST by Guillaume Van Gaver, CEO and Thomas Berge, CFO. There will be a Q&A session following the presentation.

To join the presentation, please go to:

For further information, please contact:

Guillaume Van Gaver, CEO

+33 6 32 25 91 25

Thomas Berge, CFO

+47 41 31 90 28

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