Tanla Solutions acquires Karix Mobile

Tanla Solutions Limited, one of the largest cloud communication providers in the world, today announced a definitive agreement to acquire Karix Mobile Private Limited and its affiliate, a leading mobile engagement and communication provider from GSO at an enterprise value of INR 340 crore. This acquisition accelerates Tanla’s growth strategy and deepens its enterprise reach.

Globally, enterprises increasingly rely on cloud communication services as part of their digital transfor­mation strategy. This acquisition will be instrumental in strengthening Tanla’s position as a leading cloud communication services provider.

Mumbai-based Karix Mobile Private Limited is a leading business cloud communications provider with reach to over 1,500 enterprise clients in various industries across the country. With this transaction, the combined company will be one of India’s leading enterprise cloud communications providers with marquee customers in banking, insurance, automotive, DTH, retail, consumer products, e-commerce, m-commerce, and the government.

This strategic acquisition leverages Tanla’s strong telecom carrier partnerships and Karix’s enterprise selling expertise to build a rationalized yet comprehensive solutions portfolio that can quickly generate revenues & reduce go-to-market timelines.

Tanla is excited to be partnering with GSO as we continue to grow the company.

Both Tanla and Karix will synergize to upsell & cross sell offerings to enterprises and mobile carriers.

Transaction Details

This acquisition is a combination of cash and stock of Tanla, with an aggregate purchase consider­ation of INR 340 crore.

GSO will receive INR 112 Crore in cash and INR 125 crore worth of shares (2.19 crore equity shares of Tanla at a price of INR 56.79 per share), Tanla to pay INR 112 crore from its internal accruals and take over the net debt (term loan and net working capital) of INR 103 crore.

GSO is entitled to pre-emptive rights in future allotment of capital, to enable GSO to avoid dilution.

Synergy Opportunity

The combination of Tanla and Karix will create significant cost and efficiency synergies:

• Annual cost synergies with an estimated value of approximately INR 15 crore, expected to be realized over the next six quarters post-closure of the transaction.
• The major expected source of cost and capex synergies include:

• Rationalizing platform infrastructure, optimizing connectivity (ies) and generating operational efficiencies

• Potential better negotiation with partners, optimized operational, general and administration costs as a result of scale benefits

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