Synchronica plc (LSE-AIM: SYNC; TSX-V: SYN) has closed a brokered private placement of 29,300,000 subscription receipts at CDN $0.25 per subscription receipt to raise gross proceeds of CDN $7.325 million.
The underwriting syndicate was led by Paradigm Capital Inc. and included Stonecap Securities Inc. and Cormark Securities Inc.
Gross proceeds will be held in escrow until the closing of the previously announced acquisition of Nokia’s Operator Branded Messaging (OBM) business.
Net proceeds from will be used for the US $4 million payable in cash on completion of the acquisition, for the repayment of outstanding indebtedness and for general corporate and working capital purposes.
In the event that the escrow release conditions are not satisfied by August 31, 2011, Synchronica will return all of the subscription proceeds, together with any accrued interest, to the holders of subscription receipts.
On June 30, 2011, Synchronica plc announced a conditional agreement to acquire Nokia’s OBM business which provides white-label mobile Email and Instant Messaging (IM) services across a wide range of devices to operators in North America.
Approximately 250 employees, externals and contractors are planned to transfer from Nokia to Synchronica.
The 10 North American carrier contracts planned to be transferred to Synchronica include tier-one carriers such as AT&T, Bell Canada, Rogers Wireless, Sprint Nextel, T-Mobile USA and Verizon Wireless, with more than 6 million users actively using the Email and/or IM service.
The total consideration payable to Nokia is US $25 million with US $4 million payable in cash at closing (after July 28, 2011 shareholders meeting). The balance will be paid quarterly in arrears at a rate of 22% of the revenue earned by Synchronica from the assets acquired. It is anticipated that the deferred consideration will be paid in full by the end 2014.
