ATW Tech Signs Letter of Intent for the Acquisition of Greywolf Entertainment Group
Montreal, November 6, 2018 – ATW Tech Inc. (“ATW Tech”) (TSX-V: ATW) announces today the signature of a letter of intent for the acquisition from Fastrack Trust (the “Trust”) of all of the outstanding shares of 6855318 Canada Ltd. and 6890202 Canada Ltd. (“Greywolf Entertainment Group” or “Greywolf”).
Greywolf Entertainment Group, based in Calgary, provides turnkey full commercial production for interactive TV and/or voting networks required for such shows for landline and mobile consumers. Greywolf’s subsidiaries include Triton Global Business Services Inc. (“Triton”) and Fastrack Global Billing Networks Inc. (“Fastrack”). Triton is a North American clearinghouse that provides billing and networks for phone bills in North America and over 40 other countries. Triton has been listed in the top 300 technology companies from Canada several times. Fastrack is a North American inter-exchange carrier providing networks to its switch centers that intelligently routes consumer traffic to optimized billing or response solutions. Its network is designed to handle mass calling for both short and long periods of time, using its own robust backbone Standard Internet Protocol (SIP) networks to transport traffic anywhere in the world. For the unaudited financial year ended December 31, 2017, Greywolf’s revenues were $10.0 million.
The letter of intent contemplates a purchase price of $2.95 million, which is subject to certain adjustments and payable through a cash payment of $2.0 million at closing, a vendor take-back note of $0.3 million payable in 30 equal monthly installments and $0.65 million worth of common shares of ATW Tech. No commission is payable and no change of control will result.
“We are proud to come to an agreement on this strategic acquisition of Greywolf that will help us consolidate our position in the Canadian carrier billing market, accelerate our growth, while almost doubling our revenues, and benefiting from significant cost synergies. Along with the contemplated divestiture of the Atman division announced on September 17, 2018, which represented 9.5% of ATW Tech’s revenues in 2017, this contemplated acquisition reflects our will and strategy to concentrate our activities on our core integrated payment, interactive communication and voting platforms. This acquisition shall be the first step of our acquisition growth plan with an international reach expected for 2019” said Michel Guay, President and CEO of ATW Tech.
The closing of this transaction between ATW Tech and Greywolf, which are dealing at arm’s length, is conditional among other things on ATW Tech carrying out a satisfactory due diligence on Greywolf, obtaining satisfactory financing and all necessary regulatory approvals. Closing of this transaction is expected before the end of 2018.
Update on PlusMobile Acquisition
In August 2017, ATW Tech announced the signature of a letter of intent for the contemplated acquisition of PlusMobile LLC (“PlusMobile”) and all of its subsidiaries. PlusMobile is based in Argentina and offers premium products on mobile phones with carrier billing agreements in 6 countries of Latin America and offers quality contents such as mobile apps in the business segments of education, kids, entertainment as well as mobile marketing via SMS. Although ATW Tech’s goal is still to expand its distribution network and diversify its operations internationally, especially in the Latin America fast-growing carrier billing market, ATW Tech has decided to put that contemplated acquisition on hold temporarily due to the recent volatility in the Argentina economy and in particular in the local currency. ATW Tech will revisit in due course if and when market conditions warrant.
Forward-Looking Statements Disclaimer
Certain statements in this press release may be forward-looking. Such statements include those with respect to the closing of the acquisition of Greywolf and ATW Tech’s growth and acquisition strategy. Although ATW Tech believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Such assumptions, which may prove incorrect, include the following: (i) the conditions for the transaction will be met, including a satisfactory due diligence by ATW Tech on Greywolf and ATW Tech securing financing on satisfactory terms, (ii) ATW Tech and the Trust will successfully negotiate and enter into a purchase agreement and other documents relating to the transaction, (iii) ATW Tech will successfully obtain the necessary regulatory approvals for the acquisition of Greywolf on commercially-acceptable terms, (iv) the acquisition of Greywolf will allow ATW Tech to achieve the anticipated cost synergies and (v) ATW Tech will successfully identify and conclude additional acquisitions outside of Canada in 2019. A description of other risks affecting ATW Tech’s business and activities appears under the heading “Risks Factors and Uncertainty” on pages 9 and 10 of ATW Tech’s 2017 annual management’s discussion and analysis, which is available on SEDAR at www.sedar.com. No assurance can be given that any events anticipated by the forward-looking information in this press release will transpire or occur, or if any of them do so, what benefits that ATW Tech will derive therefrom. ATW Tech disclaims any intention or obligation to update or revise any forward-looking statements in order to account for any new information or any other event, except as required under applicable law. The reader is warned against undue reliance on these forward-looking statements.
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ABOUT ATW TECH
ATW Tech (TSX-V: ATW) is a leader in information technology, owner of several web platforms including VoxTel, VuduMobile, Option.vote and Bloomed. VoxTel offers various interactive communication and landline and mobile carrier billing phone solutions. VuduMobile is specialized the text messaging business for enterprises through its unique, user-friendly and bilingual test messaging application et turnkey solution allowing management of text message management programs in all kind of businesses. Option.vote offers a large scale customizable and secured multi-method voting system for unions, political parties, professional associations, and others looking for a way to reduce their voting costs and to improve their participation rates. Bloomed is a cloud-based platform to manage data (smart data) on consumers and their behaviors which is developed for marketing agencies and their campaigns for the consumer and corporate markets.