Eniro's acquisition of Direktia finalized
Eniro's acquisition of Direktia, one of Finland's leading directory companies, is now finalized. The net purchase price is set to approximately MSEK 850 and payment will be in newly issued shares. The acquisition is expected to be consolidated from December 2001.
In September, Eniro AB (publ) signed a purchase agreement with the Finnish telecom company Elisa Communications regarding the acquisition of its directory operations, Direktia Oy. On October 26, the Finnish competition authority granted approval of the acquisition. The other conditions for the purchase are now fulfilled. The purchase also includes Direktia Oy's shareholdings in the associated companies Suomen Keltaiset Sivut Oy and Finnet Media Oy. As a result of the legal structure of the companies, Eniro's purchase of these shares is somewhat postponed. However, the delay has no operative impact on the acquired operations. Direktia is expected to be consolidated by Eniro from December 2001. The acquisition is structured as an asset deal whereby amortization of goodwill is assumed to be tax deductible. The net purchase price totals approximately 850 MSEK. There are liquid funds of at least 80 MSEK in the acquired operations, giving a gross purchase price of approximately 930 MSEK. The Board of Eniro has decided to issue 12,258,265 shares, which have been subscribed and allotted to Elisa Communications. The subscription price is SEK 76, based on the weighted average price of the Eniro share during 20 days prior to the closing of the acquisition. The newly issued shares represent about 7 percent of the total number of shares. The share issue is within the range of the authorization the Board received at the Annual General Meeting on May 7, 2001. Eniro chooses not to exercise the option to pay the transaction in cash. Eniro has since its IPO taken an active role in the consolidation of the directory industry. In order to continue on this successful path and to remain open to all opportunities, it as essential for Eniro to have a strong cash balance. By paying in shares the company secures a stronger balance sheet that enables rapid actions in the future. Direktia Oy is the second largest directory company in Finland and is the official publisher of the Yellow Pages (Suomen Keltaiset Sivut) in the Helsinki area as well as the leading directory assistance operator. The acquisition further strengthens Eniro's presence in the Finnish directory market, particularly in the Helsinki area. Revenues for 2001 generated by the acquired operations in Direktia are estimated to approximately MSEK 390, with an EBITDA of about MSEK 90. The synergy effects of the acquisition are estimated to total MSEK 20-25 annually from 2003. Pär Kempe, at present President of Eniro's operations in the Eastern Europe Region, will become COO of the new Eniro Finland. Mr Kempe will work together with Tor-Björn Stenfors, responsible for Eniro's current Finnish operation.