ATW Tech signs a Letter of Intent for the sale of its VuduMobile division
MONTREAL, July 18, 2019 (GLOBE NEWSWIRE) — ATW Tech Inc. (the “Company” or “ATW Tech”) (TSX-V: ATW) today announces the signature of a Letter of Intent for the sale of its VuduMobile division to an arm’s length third party. The letter of intent provides for a cash purchase price of $1,350,000, payable as follows: $300,000 as an advance upon signature of the letter of intent, $500,000 payable 30 days after closing, and $550,000 payable 60 days after closing. The future payments will be secured by a lien charging the purchased assets.
“This transaction is profitable for ATW Tech, since the purchase price represents more than two-and-a-half times the VuduMobile division’s revenues in 2018, as well a multiple of more than 8 times its EBIT forecast for 2019. This selling price also compares very favorably with the price paid for VuduMobile by ATW Tech in the fall of 2017, being $600,000 ($288,560 in cash and $311,440 in shares). In addition, ATW Tech will remain a preferred distributor of VuduMobile products following the transaction,” said Michel Guay, President and CEO of ATW Tech.
Mr. Guay further added: “Representing the culmination of a detailed strategic review and an in-depth assessment of our activities in recent months, the proceeds of this sale will allow ATW Tech and its VoxTel division to focus on its key activities and resources related to its integrated payment solutions platforms (“fintech”) via telecom operators (more commonly known as “Direct Carrier Billing”) and other payment mechanisms (such as mobile cellular payments) as well as its innovative voting products via the web and telephony. These proceeds will also provide us with greater financial flexibility to continue our organic growth in these flagship businesses as well as our acquisitions growth initiatives as part of our expansion and geographic diversification plan. In that regard, discussions and due diligence relating to the acquisition of Greywolf Entertainment Group, for which the signature of a letter of intent was announced on November 6, 2018, continue between the two groups.”
The completion of the transaction is subject to certain conditions, including satisfactory due diligence and the negotiation and signature of definitive purchase and sale agreement. Closing of the transaction is expected on July 31, 2019. The parties are coordinating between them to see to a rigorous operational transition period, to ensure smooth business continuity for VuduMobile, its customers, suppliers, and employees.
The TSX Venture Exchange and its Regulatory Services provider (as per meaning assigned to this term in TSX Venture Exchange’s policies) bear no liability as to the relevance or accuracy of this press release.
ABOUT ATW TECH
ATW Tech is a leader in financial technologies (‘fintech’), owner of several web platforms including VoxTel, VuduMobile, Option.vote and Bloomed. VoxTel offers various interactive communication, landline and mobile carrier billing phone solutions. VuduMobile is specialized in text messaging for enterprises through its unique, user-friendly and bilingual text messaging application and turnkey solutions. Option.vote offers a large scale, customizable, and secure 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.
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 sale of the VuduMobile division and ATW Tech’s growth and business 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, (ii) ATW Tech will successfully negotiate and enter into a purchase agreement and other documents relating to the transaction, and (iii) ATW Tech will successfully use the proceeds of sale for the purposes described above and will succeed in implementing its business plan for the VoxTel division. A description of other risks affecting ATW Tech’s business and activities appears under the heading “Risk Factors and Uncertainty” on pages 14 and 15 of ATW Tech’s 2018 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.