Opera divests its connected TV business

Opera Software ASA (“Opera” or the “Company”) entered 19 December 2016 into an agreement to sell a majority stake in its TV business (“Opera TV”) to Moore Frères & Company (“Moore Frères”), a US based investment firm focused exclusively on the tech, media, telecom industries (the “Transaction”). The Transaction values Opera TV to an enterprise value of USD 114.3m. Opera will remain as a minority shareholder in Opera TV by rolling over a part of its equity stake. The purchase price consists of a cash consideration of USD 80m and preferred shares equivalent to 30% of Opera TV’s common equity (not adjusted for management option program). The Transaction will not trigger taxation for Opera Software ASA.

Closing of the Transaction took place simultaneously with the entering into of the agreement and all conditions for completion have therefore been fulfilled, including the payment of the cash consideration of USD 80m.

Opera TV is the market leader in enabling the TV industry’s transition to OTT, delivering the most widely deployed HTML5 platform to over 60 customers. The Opera TV product portfolio powers rich web experiences on over 40 million connected devices each year, including Smart TVs, set-top boxes, Blu-ray Disc players and game consoles. Its customer base includes market leaders, such as Sony, Samsung, TiVo, Verizon and Sagemcom. Opera TV has operated as a separate business unit since 2013, and reported 2015 revenue of USD 31.4m and USD 20.3m for the first nine months of 2016. Opera TV’s reported adjusted EBITDA for the first 9 months of 2016 was USD 9.0m. Headquartered in Norway, Opera TV currently has about 180 employees located across 14 countries, including Sweden, Poland, USA, Japan, China, Korea, Taiwan and Brazil.

Lars Boilesen, CEO of Opera Software ASA, said, “Moore Frères has impressive TMT and operational expertise that will help Opera TV expand its offering and serve a broader array of customers worldwide,”. “The Opera TV business has significant potential to drive continued innovation and unlock the full potential of the connected TV.  We are pleased to retain a minority stake in order to benefit from the company’s continued growth and success.”

Aneesh Rajaram, General Manager of the Opera TV business unit, will continue to lead the business as Opera TV’s CEO post Transaction.

As previously communicated, Opera targets a net cash/debt position of zero and will use proceeds from this Transaction to pay out an extraordinary dividend in connection with Opera's 2017 Annual General Meeting.

Transaction and financial highlights:

• Opera received an upfront amount of USD 80 million in cash at the close of the Transaction
  • ●     Opera has rolled over a part of its ownership in Opera TV. Opera has  received a class of preferred shares at closing that, at Opera’s discretion, can be converted to 30% ownership in Opera TV’s common equity (not adjusted for management option program)
  • ●     The Transaction has customary net working capital and net debt adjustment mechanisms
  • ●     Moore Frères and Opera have entered into a customary shareholder agreement for the joint ownership of Opera TV
  • ●      Morgan Stanley Senior Fund and Morgan Stanley Credit Partners provided financing to Moore Frères & Company.

Type of transaction: The Transaction is a divestment of Opera’s business unit Opera TV.

Description of the business having been divested:

Opera TV is the market leader in enabling the TV industry’s transition to OTT, delivering the most widely deployed HTML5 platform to over 60 customers. The Opera TV product portfolio powers rich web experiences on over 40 million connected devices each year, including Smart TVs, set-top boxes, Blu-ray Disc players and game consoles. Its customer base includes market leaders, such as Sony, Samsung, TiVo, Verizon and Sagemcom. Opera TV has operated as a separate business unit since 2013, and reported 2015 revenue of USD 31.4m and USD 20.3m for the first nine months of 2016. Opera TV’s reported adjusted EBITDA for the first 9 months of 2016 was USD 9.0m. Headquartered in Norway, Opera TV currently has about 180 employees located across 14 countries, including Sweden, Poland, USA, Japan, China, Korea, Taiwan and Brazil.

The following table summarizes Opera TV’s revenue 2013-2015 and 9M 2016:

The Company did not report Gross Profit, Adjusted EBITDA or Normalized EBIT for the Opera TV segment prior to Q3 2016. Annual revenue figures for 2013-2015 are reported as Device OEMs in Opera Software ASA’s annual reports.

Agreements with senior employees or members of the board: Opera has a retention agreement with Aneesh Rajaram, Opera TV’s CEO.  Aneesh Rajaram is entitled to a cash bonus in the event of a sale of Opera TV and to stay-on in his current position in Opera TV post the Transaction. Opera does not have any agreements in place with members of the board outside of standard non-competition and non-solicitation agreements.

Carnegie acted as financial advisor to Opera in relation to the Transaction. Advokatfirmaet Schjødt acted as legal advisor to Opera in relation to the Transaction. 

For further information, please contact:

Petter Lade, Investor Relations

Tel: +47 2369 2400

About Opera:

Opera holds shares in several different businesses, including Opera Mediaworks/AdColony which helps publishers monetize their content through advertising and advertisers reach the audiences that build value for their businesses, capitalizing on a global consumer audience reach that exceeds 1 billion; Opera Apps and Games (Bemobi); “Performance & Privacy” (Skyfire and Surfeasy); and Opera TV.

About Moore Frères & Company:

Moore Frères & Company is a New York-based investment holding company that primarily focuses on acquiring companies across the global technology, media and telecommunications (TMT) sector.  Founded in 2014, the Company invests in TMT assets with the intention of perpetual ownership, which provides continuity to position complex businesses for long-term growth in the rapidly changing connected economy.  Moore Frères & Company utilizes deep digital, line management, business development, and financial expertise to uncover and unlock transformative growth opportunities.  The Company’s approach offers the best of both financial and strategic investors with limited daily involvement on operational matters while leveraging deep sector insights, industry relationships, and strategy experience to grow enterprise value in its businesses.