CORRECTION: CLARIFICATION TO THE ATTACHMENT, SLIDE 12, TECNOMEN AND LIFETREE COMBINE
Tecnomen Corporation STOCK EXCHANGE RELEASE
December 15, 2008, at 8.30am
TECNOMEN AND LIFETREE COMBINE
Tecnomen has signed agreements through which Lifetree Convergence Ltd.
(“Lifetree”), an India-based provider of Convergent Billing and Customer Care,
Rating, and Messaging platforms, will combine with Tecnomen. Through these
agreements Tecnomen will acquire up to 96.6% of the share ownership of Lifetree
for a consideration of EUR 33.2 million, to be paid through a combination of
cash and issuance of new shares of Tecnomen. For the financial period ending on
March 31, 2008, according to Indian GAAP and with 63.0 as the EUR/INR exchange
rate, Lifetree's net sales came to EUR 11.3 million; profit after taxes was EUR
3.4 million, and the company had no debt and net assets of EUR 8.4 million.
Lifetree had a cash balance of EUR 9.5 million as on 31st Oct, 2008. This
translates to an enterprise value (for 100%) of EUR 24.9 million.
Of the consideration, EUR 21.4 million will be paid in cash and the remainder
EUR 11.8 million in new Tecnomen shares to be issued. In the transaction, the
issue price applied for Tecnomen's shares will be EUR 0.86 per share. The cash
portion will be financed in part with a long-term loan and partly from the cash
funds of Tecnomen. The shareholders of Lifetree will be paid partly in cash and
partly in new Tecnomen shares. The new Tecnomen shares issued to Management
Shareholders are subject to a three-year lock-up. Tecnomen will extinguish its
current stock option pool and will create a new option pool of Tecnomen shares
which shall be a maximum of 8.5% of Tecnomen's fully diluted shares, not however
exceeding 6,840,036 options. Post the transaction, IFC, as a current Lifetree
shareholder, will become a shareholder in Tecnomen holding about 6.17% shares
and 5.65% on a fully diluted basis.
This transaction will create significant long-term value for its shareholders.
The combined entity - Tecnomen Lifetree Plc - will offer a highly synergistic
Product suite and will be in a position to offer an unmatched
Convergence-oriented value proposition to customers. The combined proposition
will map to 100% of a Telco's OSS/BSS and messaging requirements. The expanded
global reach established by this transaction will enhance coverage in matured
and emerging markets. The combined entity's clientele will comprise more than
120 customers, spread across 70 countries. Coverage of emerging markets, in
particular, will be unmatched. Tecnomen Lifetree Plc will have strong growth
potential and increased cost-competitiveness, with strong penetration into
Telecoms Operator group accounts with multiple revenue-generating properties, as
well as a competitive-cost R&D and delivery base in India.
Tecnomen CEO Jarmo Niemi will be the CEO of the new company, and Atul Chopra,
the Managing Director and CEO of Lifetree, will be appointed as the combined
Company's COO & President.
"The proposed transaction is in line with our goal of being a fully Convergent
Charging and Billing solutions provider and provides an opportunity to
complement our strong presence in the market for Pre-paid products with a strong
presence in the Converged landscape. It also adds to our Product portfolio and
enhances the competitiveness of our Messaging business unit. The transaction
provides access to a larger customer base in emerging markets such as Africa and
Asia, to drive revenue growth in coming years. This complementary combination
represents a perfect strategic fit and delivers a substantial opportunity for
solid future growth of the combined entity,” says Niemi.
From the perspective of Lifetree, Chopra explains, “This is an attractive
combination. Lifetree has, in the relatively short span of its existence, built
an organization with high penetration in emerging markets with both top and
bottom-line growth. We are now looking for inorganic options to generate further
economies of scale and an opportunity to leverage our strong mind share and IP.
We believe this transaction will immensely benefit all stakeholders, including
existing and future customers, who will now gain the benefit of our
complementary value proposition”.
The closing of the transaction is subject to certain approvals at the Tecnomen
shareholders' meeting and is subject to standard regulatory and statutory
approvals. The transaction is expected to be completed by the end of March 2009.
Upon completion of the transaction, Lifetree will become a subsidiary of
Tecnomen. Also prior to closure, a proposal to rename the company as “Tecnomen
Lifetree” will be put forth for shareholders' approval. In connection with the
listing of new shares, Tecnomen will publish a prospectus.
Tecnomen and Lifetree will hold a press conference at 13:00pm on December 15,
2008, in the Pavillion conference room at the Scandic Simonkenttä, in Helsinki.
The material presented at the press conference will be available at
www.tecnomen.com and www.lifetreeindia.com.
Appendix: Presentation about the transaction
TECNOMEN CORP.
Board of Directors
FURTHER INFORMATION
Lauri Ratia, Chairman of the Board of Tecnomen, at tel. +358 50 2922
Jarmo Niemi, CEO of Tecnomen, at tel. +358 9 8047 8799
DISTRIBUTION
NASDAQ OMX Helsinki Oy
Major media
www.tecnomen.com
About Tecnomen
Tecnomen, founded in 1978, is one of the leading suppliers of messaging and
charging solutions for telecom operators worldwide. Tecnomen markets and sells
its products and services through its own organisation, as well as through
global and local partners, and has supplied its products to more than 100
customers around the world. Headquartered in Espoo, Finland, Tecnomen has 360
employees working in 15 locations worldwide. Tecnomen is listed on the main list
of NASDAQ OMX Helsinki Ltd. For more information on Tecnomen visit
www.tecnomen.com
About Lifetree Convergence Limited
Lifetree is a Telecommunications-focused technology product company. It is a
provider of Operational Support Systems (OSS) and Business Support Systems (BSS)
software and also offers Content Management and Delivery platforms. The company,
which focuses on emerging economies such as Africa, the Middle East, and the
Asia-Pacific region, has more than 40 installations worldwide. Headquartered in
New Delhi, India, Lifetree has around 400 employees. For more information on
Lifetree, visit www.lifetreeindia.com.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape
poverty and improve their lives. We foster sustainable economic growth in
developing countries by supporting private sector development, mobilizing
private capital, and providing advisory and risk mitigation services to
businesses and governments. Our new investments totaled $16.2 billion in fiscal
2008, a 34 percent increase over the previous year. For more information, visit
www.ifc.org.