Netmore divests M2M business to telecom, IoT operator Melita

Maltese telecom and IoT operator Melita Ltd is acquiring Netmore Group’s wholly owned subsidiary Netmore M2M AB (Netmore M2M) for an initial cash purchase price of EUR 1.75 million (approximately SEK 19.6 million), plus a conditional additional cash purchase price of up to a further EUR 2.6 million (approximately SEK 29 million). The parties have entered into an agreement on 26 January 2023 and closing will take place immediately.

Netmore Group launched the Netmore M2M business in 2019 as part of its then business strategy to target the European market for SIM card based IoT connectivity. The subsidiary has grown steadily since its formation, and today has over 300 customers in over 30 countries.

Through this transaction, these customers will have new tools for SIM card based IoT project deployment as Melita brings a proprietary connectivity portal with increased functionality, extensive IoT SIM roaming coverage, as well as additional security options. Melita is licensed and regulated in Malta, and operates its international IoT business under the brand melita.io.

The additional cash purchase price will be calculated based on the EBITDA of Netmore M2M in 2023 (additional purchase price 1) and the first half of 2024 (additional purchase price 2).

Profit impact and other economic effects related to the transaction

The sale of Netmore M2M will initially raise EUR 1.75 million (approximately SEK 19.6 million) for Netmore Group. The capital gain is reported as financial income during the first quarter of 2023.

Subject to target achievement, the additional purchase price 1 will accrue to Netmore Group in Q1 2024 and the additional purchase price 2 in Q3 2024.

At the same time, the divestment reduces Netmore Group’s quarterly sales by approximately SEK 1.1 million. The divestment is not expected to have a significant impact on the Group’s EBIT.

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