After a year and more of rumors about iTouch‘s sale, it has finally happened: the once-European biggie in the mobile content space has been sold to Italian mobile content firm Buongiorno in a complex transaction, for a total of about $191 million. Out of this, Buongiorno will pay $175 million to iTouch shareholders, of which $100 million in cash and the remaining in shares. Additionally Buongiorno will absorb the current $16 million net debt of iTouch. The deal is subject to approval by Buongiorno shareholders and regulatory approval.
This comes a few months after iTouch’s management bought itself back from the Japanese mobile content firm For-Side, for an estimated $100 million. Back then, Oak Investment Partners and Goldman Sachs led the financing syndicate in management buyback, where Oak owned 40 percent and Goldman owned 20 percent, and now they will become shareholders in Buongiorno.
Banca IMI (Intesa Sanpaolo Group) will arrange a $156 million loan facility for Buongiorno to fund the transaction. Wayne Pitout, CEO of iTouch, will join Buongiorno’s board as an Executive Director, together with a designee of Oak Investment Partners.He will also be in charge of M&A activities in the new combined entity.
Founded in 1995 in South Africa, iTouch was sold to Japanese firm For-Side in 2005 for about $370 million, and then the management buyout happened in February this year. After the acquisition, Buongiorno will have a team of more than 1,100 professionals in 20 countries. It says it will have 2006 pro-forma aggregated revenues of Euro 318 million and pro-forma EBITDA of Euro 39 million, making it among the biggest mobile content players around.
More details in release (PDF link).
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