PT Lingua Group operates a similar business to iSentric however is based in Indonesia. The proposed acquisition is complementary to iSentric allowing it to deploy its relationships with mobile content suppliers into the Indonesian market and further develop its payments technology with Indonesian Banks.
Details of the proposed Transaction
The proposed acquisition will be funded by a combination of shares and cash, which is yet to be finalised. The financial aspects of transaction are as follows:
1. Arte Mobile is expected to generate NPAT for the financial year ended 2015 ("FYE2015") in excess of $A2.2M; and
2. The proposed acquisition will be based on a multiple of the NPAT for FYE2015, with a cap on the consideration of $A18M.
The transaction is subject to due diligence, receipt of all regulatory approvals including a shareholder meeting to approve the proposed transaction.
Background on PT Lingua Group
PT Lingua Group is a mobile value added service provider specialising in mobile entertainment and mobile solutions. The Group offers diverse and popular locally produced mobile content to suit the market in Indonesia. The Group is connected to 3 major telecommunication companies in Indonesia, namely Telkomsel, Indosat and XL (in which PT Lingua Group are ranked in the top tier in terms of revenue). Being connected to these 3 major telecommunication providers which dominate over 90% of Indonesian mobile market, PT Lingua Group has access to over 255 million mobile subscribers.
PT Lingua Group operates in the mobile value added service industry through three main divisions:
1) Mobile Content and Services - Locally produced mobile content including videos, text quotes, games, photos and voices delivered as Ring-back-tone (RBT);
2) Celebrity Music and Content - Produced music and celebrities' related content delivered in various formats such as smartphone apps, personal/behind-the-scene videos, photos, latest gossips/updates via text, full track music downloads, CD Album, music and voice as Ring-back-tone (RBT).
3) Content Aggregation and Digital Payment - through its MobilePRO content aggregation and billing platform, PT Lingua Group has enabled several partners including Newscorp's Ballball soccer contents to deliver their content to mobile subscribers with payment collected through subscriber's airtime credit.
Managing Director of iSentric, Aaron Lee said that the proposed transaction meets all the key acquisition criteria of the company. It will expand the geographic footprint of iSentric into Indonesia whilst leveraging existing relationships and technology. PT Lingua Group has a competitive advantage in its market, which is significantly larger that the Company's existing markets, with an experienced and committed management team capable of maintaining growth. With a large customer base which is continuing to grow the proposed acquisition is expected to be substantially EPS accretive to iSentric.
About iSentric Ltd
iSentric Ltd (ASX:ICU) is engaged in the business of provision of software-based mobile telecommunications and technology business in the Asia-Pacific market. The Company's business divisions include Enterprise Mobility, Digital Payments and Digital Media Services. Its Enterprise Mobility division includes Enterprise Mobile Messaging, Digital Banking, Enterprise Mobile Application Development and Mobile Device Management. Its Digital Payments division includes Operator Billing, Mobile Banking and Hybrid E-Wallet. Its Digital Media Services division includes Content Creation and Content Distribution. The Company distributes digital content through a range of channels and platforms, including Mariku.asia, Telco branded platforms and third-party advertising networks. The Company creates and aggregates a range of digital content for the mass consumer market, including games (mobile and desktop), news feeds (sports, financial, local, international and entertainment) music and videos.