Pro-Forma 2018 Revenue Outlook of $49 Million
Expected to be Accretive to 2019 Earnings
Conference Call Scheduled for Friday, June 8 at 11am
ET
NEW YORK and LONDON, June 7,
2018 /PRNewswire/ -- Pareteum Corp. (NYSE
American: TEUM) and Artilium plc (AIM: ARTA) today
announced that they have reached agreement for Pareteum to acquire
Artilium. Under the terms of the acquisition, which have been
further detailed today in an announcement issued under Rule 2.7 of
the UK Takeover Code, each Artilium shareholder will be entitled to
receive 0.1016 Pareteum shares and 1.9
pence in cash per Artilium share upon completion of the
transaction. The acquisition values each Artilium share at
19.55 pence and the entire issued and
to be issued ordinary share capital of Artilium at approximately
$104.7 million (or
£78.0 million), based on Pareteum's closing share price of
$2.33 on June 6, 2018 and the
exchange rate of US$1.3413: £1.
The transaction has been approved by the Pareteum Directors and
all of the independent Artilium Directors (the "Artilium
Recommending Directors"). The two companies recognize
that the businesses are a natural fit and that Artilium complements
and extends Pareteum's geographic footprint in Europe.
Artilium and Pareteum have since October
2017 benefitted from a strategic alliance entered into with
the intention of jointly pursuing new and developed markets,
accelerating growth and increasing market penetration for both
Artilium and Pareteum. Since announcing the strategic alliance, the
Pareteum Directors and Artilium's Recommending Directors have been
incredibly pleased by the way the businesses have successfully
collaborated and by their customers' enthusiasm for the
partnership.
In the few months since the alliance was launched, the two
companies have collaborated on at least 18 opportunities, resulting
in 7 sales wins and an increasing pipeline of potential deals to
pursue. Pareteum estimates that over $65 million has been
added to its 36-month contractual revenue backlog as a direct
result of the engagement.
The two management teams have also worked well together and
proven to be highly complementary.
The transaction is expected to be significantly accretive to
Pareteum's non-GAAP earnings per share in FY2019(1),
produce strong growth in pro-forma operating cashflow generation
and provide material cost and revenue synergies.
Commenting on the acquisition, Robert H.
Turner, Founder, Executive Chairman and Principal Executive
Officer of Pareteum, said: "Artilium and Pareteum have a
natural fit when considering the award-winning products and
services that will be combined and offered, the expansion of
addressable markets, making us truly global in reach, and the
resulting improved executive and operating talent to lead our
company to even higher achievements and results. Since October 2017, we have operated in a strategic
alliance with Artilium, which has had materially positive results.
We will now turn our attention to accelerating this as one company.
It has been a pleasure and great honor to work with Jan-Paul Menke and Bart Weijermars to combine
our companies. The vision of open mobility and open applications
now takes a demonstrable leap forward."
Commenting on the acquisition, Jan-Paul
Menke, Non-Executive Chairman of Artilium, said:
"Pareteum and Artilium make a powerful combination. Our
Artilium shareholders are very pleased with this transaction. We
have grown Artilium with several well selected transactions, in
addition to the sales and business development achievements we have
produced. With the now significantly enhanced operating
capabilities of the combined companies, we expect even more
opportunities to become available and further improve the outlook
for shareholder growth and value to be reflected in our business.
Bart and I have had a positive and constructive experience in
working with Robert H. Turner and
his Pareteum "TEUM" to now create a very powerful platform company,
and, it is one that we feel has the capability for significant
future growth."
Pareteum believes that the ongoing participation of Artilium's
CEO, Bart Weijermars, in the
Artilium group and, in turn, the Pareteum group, is an important
element of the acquisition. Therefore, effective on
completion of the acquisition, he will be engaged as Chief
Executive Officer of Pareteum Europe and Artilium as wholly owned
subsidiaries of Pareteum.
The Directors of Pareteum and the Artilium Recommending
Directors intend to recommend unanimously that their respective
shareholders approve the transaction. The transaction is
currently expected to close in September
2018, subject to the satisfaction of certain conditions
including approval by Pareteum's stockholders of the issuance of
shares of common stock in connection with the acquisition and
approval by Artilium's shareholders of the scheme of arrangement
under English law.
The Pareteum Directors and the Artilium Recommending Directors
believe that the acquisition offers the opportunity for Pareteum
stockholders and Artilium shareholders to benefit from the
significant long term value creation that is expected to be
unlocked by the combination, as well as offering Artilium
shareholders a partial liquidity event.
The Pareteum Directors and the Artilium Recommending Directors
believe the industrial logic for bringing the two companies
together is underpinned by four key principles:
Expansion
- Enhanced ability to acquire new customers with expanded product
set.
- Significant potential to monetize customer bases through
cross-sell and upsell.
- A larger platform from which to expand into new markets.
Scale
- Pro-forma FY2018 revenues of $49.0
million.(2)
- Carrier fee and cloud cost economies of scale.
- Reduction in corporate overheads and capital expenditures.
- Reinvestment of cost savings to support further growth.
Capital
- Enhanced financial profile with which to access the capital
markets.
- Greater visibility with the investor community.
- Enhanced liquidity for Artilium shareholders.
Platform
- Strong platform for acquisitions and market consolidation.
- Significant pipeline of potential add-on M&A.
- Combined company will be the buyer of choice for many
sellers.
Advisors:
Jefferies LLC is acting as financial advisor and Hogan Lovells
is acting as legal advisor to Pareteum on the transaction.
finnCap Ltd is acting as financial advisor and Addleshaw Goddard
LLP is acting as legal advisor to Artilium on the transaction.
Investor and analyst presentation:
There will be an investor presentation for investors and
research analysts Friday, June 8 at
11:00 a.m. New York time / 4:00
p.m. London time (dial-in
instructions below). A copy of the presentation (and any relevant
accompanying oral presentation/transcript) will be available,
subject to certain restrictions relating to persons resident in
certain restricted jurisdictions, at
www.pareteum.com/investors and
www.artilium.com/investors in due course.
Pareteum Corporation Investor Update Conference
Call:
Date: Friday, June 8,
2018
Time: 11:00 a.m. ET
Conference ID: 5039786
Participant Dial-In Numbers:
TOLL-FREE 1-866-548-4713
TOLL/INTERNATIONAL 1-323-794-2093
U.K. TOLL +44 (0)330 336 9105
U.K. TOLL FREE 0800 358 6377
Live Webcast:
http://public.viavid.com/index.php?id=130055
Notes:
|
(1)
|
Based on projected
Pareteum non-GAAP earnings per share for the financial year ended
December 31, 2019 and onwards. Non-GAAP earnings per share excludes
stock compensation expense, amortization of intangible assets,
restructuring charges, acquisition, integration, other one-time
items and their related income tax effect. The statement that the
acquisition is expected to be earnings accretive is not intended as
a profit forecast and should not be construed as such, and is not
subject to the requirements of Rule 28 of the UK Takeover Code. The
statement should not be interpreted to mean that the earnings per
share in any future financial period will necessarily match or be
greater than those for the relevant preceding financial
period.
|
(2)
|
Pro-forma based on
management estimates. Artilium financials calendarized to December
31 and excluding impact of purchase accounting adjustments.
Pareteum FY2018 revenue estimate of $24.0 million. Artilium
FY2018 estimate of $25.0 million. Artilium financials
converted into USD at Pareteum's long term business plan rate of
USD:EUR = 0.8000.
|
About Pareteum
Pareteum is a rapidly growing cloud communications platform
company with a mission - "to connect every person and every
thing"™. Service providers, brand marketing companies, enterprise
and Internet of Things providers use Pareteum to energize their
growth and profitability through cloud communication services and
complete turnkey solutions featuring relevant content,
applications, and connectivity worldwide. To achieve this, Pareteum
has developed patent pending software platforms which are connected
to 45 mobile networks in 65 countries using multiple different
communications channels including mobile telephony, data, SMS,
VOIP, OTT services – all over the world. Pareteum integrates all
these disparate communications methods and services and brings them
to life for customers and application developers, allowing
communications to become value-added. This is a major strategic
target for many industries, from legacy telecommunications
providers to the disruptive technology and data enterprises of
today and the future.
The vast majority of Pareteum's platform is comprised of its own
proprietary software, which provides customers with a great deal of
flexibility in how they use its products now and in the future and
allows Pareteum to be market driven in its future. Pareteum's
platform services partners (technologies integrated into its SMART
Cloud) include: HPE, IBM, Sonus, Oracle, Microsoft, NetNumber,
Affirmed and other world class technology providers. Pareteum is a
mission-focused company empowering every person and every "thing"
to be globally connected – Any Device, Any Network, Anywhere.™ The
Pareteum SMART Cloud Platform targets large and growing sectors
from IoT (Internet of Things), Mobile Virtual Network Operators
(MVNO), Smart Cities, and Application developer markets - each in
need of mobile platforms, management and connectivity. These
sectors need Communications-as-a-Service (CaaS), which Pareteum
delivers.
About Artilium
Artilium is an innovative software development company active in
the enterprise communications and core telecommunication markets
delivering software solutions which layer over disparate fixed,
mobile and IP networks to enable the deployment of converged
communication services and applications.
In broad terms, Artilium provides services to both telecom
infrastructure customers (across Mobile Network Operators (MNOs),
Mobile Virtual Network Operators (MVNOs), Mobile Virtual Network
Enablers (MVNEs), Fixed and Alternative Operators, Hosting
Providers, System Integrators and Managed Service Providers) such
as Proximus and Telenet, as well as enterprise customers, such as
Philips. Across products and businesses, Artilium provides services
to more than 20 million end-users.
Participants in the Solicitation
Pareteum and its directors, officers, employees and agents
may be considered participants in the solicitation of proxies from
Pareteum's stockholders in respect of the acquisition, including
the issuance of shares of Pareteum's common stock in relation to
the acquisition. Information about Pareteum's directors and
executive officers is set forth in Pareteum's Annual Report on Form
10-K for the year ended December 31,
2017 which was filed with the SEC on March 30, 2018, and Pareteum's proxy statement
for its 2017 annual meeting of stockholders, which was filed with
the SEC on July 27, 2017. Other
information regarding potential participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement relating to the issuance of shares of
Pareteum's common stock in the acquisition (the "Proxy Statement")
and other relevant documents when they become available.
Forward looking statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of
the Exchange Act. These forward-looking statements are based on
current expectations and projections about future events.
Pareteum's actual results may differ materially from those
discussed herein, or implied by, these forward-looking statements.
Forward-looking statements are generally identified by words such
as "believe," "expect," "anticipate," "intend," "estimate," "plan,"
"project," "should," "will," "would," "could," "continue," "likely"
or the negative or plural of such words and other similar
expressions. In addition, any statements that refer to expectations
or other characterizations of future events or circumstances are
forward-looking statements. The statements that contain these or
similar words should be read carefully because these statements
discuss Pareteum's future expectations, contain projections of
Pareteum's future results of operations or of Pareteum's financial
position, business strategy, short-term and long-term business
operations and objectives, financial needs and other
"forward-looking" information. These forward-looking statements are
subject to a number of risks, uncertainties and assumptions,
including, without limitation: the risk that the acquisition
is not completed on a timely basis or at all; the ability to
integrate Artilium into Pareteum's business successfully and the
amount of time and expense spent and incurred in connection with
the integration; the possibility that competing offers will be
made; the risk that the economic benefits and other synergies that
Pareteum's management anticipates as a result of the acquisition
are not fully realized or take longer to realize than expected; the
risk that certain risks and liabilities associated with the
acquisition have not been discovered; the risk that the approval of
Artilium shareholders of the acquisition or the requisite approval
by Pareteum's stockholders of the issuance of the new shares of
common stock in relation to the acquisition may not be obtained or
that other conditions of the acquisition will not be satisfied;
changes in global or local political, economic, business,
competitive, market and regulatory forces; changes in exchange and
interest rates; changes in tax and other laws or regulations;
future business combinations or disposals; operating costs,
customer loss and business disruption (including difficulties in
maintaining relationships with employees, customers or suppliers)
occurring prior to completion of the acquisition or if the
acquisition is not completed at all; changes in the market price of
shares of Pareteum or Artilium; and changes in the economic and
financial conditions of the businesses of Pareteum or
Artilium.
The foregoing does not represent an exhaustive list of risks.
Additional factors are described in Pareteum's public filings with
the SEC, and other factors will be described in the Proxy
Statement. Moreover, Pareteum operates in a very competitive
and rapidly changing environment. New risks emerge from time to
time. It is not possible for Pareteum's management to predict all
risks, nor can Pareteum assess the impact of all factors on its
business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements Pareteum may make. In
light of these risks, uncertainties and assumptions, the future
events and trends discussed in this press release may not occur and
actual results could differ materially and adversely from those
anticipated or implied in the information in this press
release.
Any forward-looking statements in this press release are not
guarantees of future performance, and actual results, developments
and business decisions may differ from those contemplated by those
forward-looking statements, possibly materially. Accordingly, you
should not place undue reliance on any such forward-looking
statements. All forward-looking statements included in this press
release are based on information available to Pareteum management
on the date of such information. Except to the extent required by
applicable laws or rules, Pareteum undertakes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise. All
subsequent written and oral forward-looking statements attributable
to Pareteum or persons acting on its behalf are expressly qualified
in their entirety by the cautionary statements contained throughout
this press release.
No profit forecasts or estimates
No statement in this press release is intended as a profit
forecast or estimate for any period and no statement in this press
release should be interpreted to mean that earnings or earnings per
ordinary share for Artilium or Pareteum for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per ordinary share for Artilium or
Pareteum.
Pareteum Investor Relations Contacts:
InvestorRelations@pareteum.com
Denis McCarthy
Senior Vice President Corporate Development
(646) 810-2182
Ted O'Donnell
Chief Financial Officer
(212) 984-1096
Alexander Korff
Corporate Secretary
(646) 810-2182
Stephen Hart
Hayden IR
917-658-7878
Carrie Howes
Rayleigh Capital
Dubai- London
T UAE: +971 (0) 55 997 0427 | T UK: +44 (0) 870 490 5443 | T CAN:
+1 416 900 3634
Artilium Investor Relations Contacts:
Jan-Paul Menke
Non-Executive Chairman
Bart Weijermars
Chief Executive Officer
Rupert Hutton
Chief Finance Officer
in each case via Buchanan, as
below:
Chris Lane, Buchanan
+44 (0)20 7466 5000
Jamie Hooper, Buchanan
+44 (0)20 7466 5000
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SOURCE Pareteum Corporation