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CP - Link Mobility expands global presence with the acquisition of SMSPortal, the South African market leader with substantial international business - Attachment: Acquisition of SMSPortal - Investor Prese

Company: LINK Mobility Group Holding Date: 2025-06-24 Language: English Register to download
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# Acquisition of SMSPortal

South African market leader with significant value creation potential

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24 June 2025

## Disclaimer

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### About this presentation

This presentation (the Presentation) has been prepared by LINK Mobility Group Holding ASA (the Company, and together with its consolidated subsidiaries, LINK) for a brief presentation of LINK in connection with the announcement by LINK of the acquisition of SMSPortal by LINK (the Transaction). This Presentation should not be used for any other purpose.

This Presentation is prepared based on information obtained from LINK, SMSPortal and public sources on or prior to the date hereof and has not been independently verified. This Presentation only contains summary information and no representation or warranty, express or implied, is or will be made in relation to and no reliance should be placed on the fairness, accuracy, correctness or completeness of the information or opinions contained in this Presentation.

This Presentation contains forward-looking statements, which are based on current expectations, projections and assumptions about future events. Statements contained in the Presentation, other than statements of historical fact, regarding future events or prospects, are forward-looking statements. The words "may", "will", "should", "expect", "anticipate", "believe", "estimate", "plan", "predict", "intend" or variations of these words, as well as other statements regarding matters that are not historical fact or regarding future events or prospects, constitute forward-looking statements. The Company has based these forward-looking statements on its current views with respect to future events and financial performance. These views involve a number of known or unknown risks, uncertainties and assumptions, which could cause actual results to differ materially from those predicted in the forward-looking statements and from the past performance of LINK. As a result, you should not and may not rely on these forward-looking statements. No representation or warranty is made that any forward-looking statement will occur.

Forward-looking statements speak as of the date of this Presentation and no one undertakes to publicly update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise. Neither the Company nor its subsidiaries or affiliates, or their respective directors, offices, employees, advisers or agents accepts any responsibility or liability whatsoever or makes any representation or warranty, expressed or implied, as to the truthfulness, fairness, accuracy, completeness or verification of such information. Accordingly, undue reliance should not be placed on any forward-looking statement contained in this Presentation. Certain numbers in the Presentation are unaudited or are based on internal company records or based on preliminary calculations by LINK on the effects of the Transaction. Some of these number may be subject to further review in due course, may be amended and the final numbers may differ from those set out in this Presentation. Until such time as that review is complete and any final numbers are published, no reliance shall be placed on, and LINK shall not be liable in any way in respect of such numbers.

Further, this Presentation may include market and industry data obtained by LINK from industry publications and surveys. LINK may not have access to the facts and assumptions underlying the numerical data, market data and other information extracted from public sources and as a result neither LINK nor any of LINK's advisors or representatives are able to verify such information, and assume no responsibility for the correctness of any such information.

Any information contained or views expressed in this Presentation do not purport to be comprehensive and are based on financial, economic, market and other conditions prevailing as of the date of this Presentation and are subject to change without notice. Neither LINK nor any other person undertakes any obligation to update or revise any information or statement contained in the Presentation, whether as a result of new information, future events or otherwise, except to the extent required by law.

No representation, warranty, or undertaking, express or implied, is made by LINK or its affiliates or their respective directors, officers, employees, agents or advisers (collectively Representatives), and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein, for any purpose whatsoever. Neither LINK nor its Representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection with this Presentation. Nothing contained in this Presentation is or should be relied upon as a promise or representation as to the future. Except where otherwise expressly indicated, this Presentation speaks as of the date hereof. All information in this Presentation is subject to updating, revision, verification, correction, completion, amendment and may change materially and without notice. In giving this Presentation, none of LINK or Representatives undertake any obligation to provide the Recipient with access to any additional information or to update the contents of the Presentation, or to correct any inaccuracies in any such information, including any financial data or forward-looking statements. The information contained in this Presentation should be considered in the context of the circumstances prevailing at this time and has not been, and will not be, updated to reflect material developments which may occur after the date of the Presentation.

This Presentation and the information contained herein does not constitute or form a part of, and should not be construed as, an offer for sale or subscription of or solicitation or invitation of any offer to subscribe for or purchase any securities of the Company or its affiliates, and neither this document nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. In particular, the information within this Presentation must not be used in making any investment decision.

This Presentation and the information contained herein is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

The contents of this Presentation are not to be construed as financial, legal, business, investment, tax or other professional advice. This Presentation does not constitute and is not intended to form part of any offer, or the solicitation of any offer, to buy, subscribe for or sell any shares (or any other security) in the Company or any subsidiary of the Company and nothing in this Presentation shall in any way constitute or form part of any legal agreement or be relied on in connection with, any contract, commitment or investment decision.

Each recipient of the information contained in this Presentation is responsible for making its own independent assessment of the business, financial condition, prospects, status and affairs of LINK. No person shall have any right of action against LINK or any other person in relation to the accuracy or completeness of the information contained in the Presentation.

This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts.

### LINK has a strong track record for growth through value accretive acquisitions

**35+** Acquisitions last decade

**~40%** Messages sent CAGR 2015-2024

**~6.5x** Historical mean multiple

### **Active M&A strategy with clear play-book:**

- ✓ Strong local market position and telecom operator relationships.
- ✓ Cash EBITDA positive and cash accretive from day one.
- ✓ Solid, well-diversified customer portfolios with low churn.
- ✓ ~80% overlapping technology and strong commercial enterprise focus.
- ✓ Synergy potential to create further value.

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acquires

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**Market-leading messaging provider** with a robust South African ✓ and international customer base operating in a growing market.

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**Organic growth opportunities** driven by a large and loyal ✓ customer base and increasing demand for mobile solutions.

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**Potential for accelerated growth** through introduction of LINK's ✓ high-margin CPaaS offering.

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✓ **Attractive upfront multiple** of 4.6x LTM April 2025 cash EBITDA

## Accretive acquisition of the number one player in South Africa with significant international business

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#### (1) Figures for last 12 months as of April 2025, CAGR calculated over last three years. The USD/ZAR exchange rate of 18.18 is employed and represents the average monthly rate over the period from April 2024 to May 2025

## SMSPortal: High-quality vendor with strong market position

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- ✓ Pure SMS A2P player with an established market-leading position in South Africa
- ✓ Strong commercial enterprise focus
- ✓ Market consisting of smaller local competitors and a few international players
- ✓ Market-leading technology platform with superior throughput capabilities

**Stable customer base with low churn<sup>1</sup>**

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**Leading market position<sup>2</sup>**

million SMS per month

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(1) Revenue churn rate (2) Source: Estimates based on company data

## Compelling financial track-record and growth outlook

### **Track record for profitable growth**

- Exceptional revenue growth over the past three years, driven by successful upselling and customer retention strategies.
- Scalable model with a robust EBITDA margin and a history of profitable growth.
- End-to-end automation and self-service enable high profitability across customer segments.
- Strong independent local management team with demonstrated track-record for growth continuing under LINK ownership.

### **Compelling growth outlook**

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- Expected high single digit annual gross profit growth from current operations and stable or improving margins.
	- Expected continued SMS market growth combined with opportunity to grow market share due to SMSPortal's unique market position
- Additional growth potential from introducing high-margin CPaaS products such as conversational solutions on RCS and WhatsApp

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## Strong market fundamentals

### **Positive market dynamics with growth potential Stable SMS A2P market growth**

- SMS is the dominant communication channel, with unmatched reach across local markets. Limited e-mail reach with only 10 million e-mail addresses across a population of 64 million.
- Young population with a growing middle-class responsive to digital messaging solutions.
- Market SMS volumes has grown by a CAGR of 7% 2020-2024<sup>1</sup>
- Diversified industry exposure
- Advanced CPaaS solutions in early-stage, creating future multichannel growth opportunities.
- Opportunity to expand into underpenetrated sectors.

Annual A2P SMS messages in South Africa (Bn – CAGR growth%)

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#### **SMSPortal customer verticals**

Revenue by sector<sup>2</sup>

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## Stable, attractive business environment

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### **Regulatory and legal landscape similar to Europe**

- Structured legal frameworks and regulatory standards ensure stability and reduce execution risk.
- Strong financial sector and transparent tax and banking frameworks allow for efficient capital flows.
- Experienced local partners enable efficient execution and market penetration.

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- Telecom operator regulations and stringent licensing requirements support fair and predictable market conditions.
- SMSPortal is one of four companies holding interconnect agreements for messaging.
- A rapidly growing digital economy and mobile-first user base across continent drives scalable business opportunities.

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## Compelling combined financials

| in NOK million   | 1     | 2     | 4<br>Combined |
|------------------|-------|-------|---------------|
| Revenue          | 7,089 | 1,105 | 8,194         |
| EBITDA adj.      | 770   | 247   | 1,017         |
| EBITDA<br>margin | 10.9% | 22.4% | 12.4%         |
| Cash<br>EBITDA3  | 607   | 246   | 853           |
| Cash             | 2,446 | (991) | 1,455         |
| Total debt       | 3,486 | -     | 3,486         |
| NIBD             | 1,041 | 991   | 2,032         |
| NIBD/<br>EBITDA  | 1.4x  | -     | 2.0x          |

(1) Source: Unaudited LTM proforma financials as of Q1 2025, excluding the acquisitions of The SMS Works & FireText Communications. (2) Source: Unaudited LTM financials as of April 2025. Figures are based on USD/NOK FX rate 9.89 as of 17 June 2025. (3) Cash EBITDA: EBITDA adj. less capex

(4) Note that the combined figures (a) are unaudited and have been summarized by LINK for the purpose of this presentation using its best estimate and are based on available financial information as of the date of this Presentation, (b) may be amended and that the final numbers may differ from those set out herein, and (c) are presented for illustration purposes only and does not intend to be, nor shall be construed as, pro forma financial information as calculated and presented in accordance with the EU Prospectus Regulation.

#### **Transaction details**

- Total purchase price up to USD 145 million
	- USD 100 upfront payment financed with cash on hand
	- USD 15 million equity consideration, issuing approx. 5.9 million shares at NOK 26 per share
	- Additional conditional payment potential of max USD 30 million in two annual tranches

#### **Attractive and highly accretive valuation**

- Cash & share consideration valuation of 4.6x cash EBITDA
	- 5.8x including max conditional payment of USD 30 million
- Highly accretive versus LINK own valuation
- Combined leverage ratio as of Q1 2025 of 2.0x, within financial policy of max 2.0x-2.5x
- US receivables lowers combined leverage to 1.8x

## Establishing strong position in a new region with significant potential for growth and value creation

- Market-leading player with robust South African and international customer base
- Leading technological platform

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- Scalable model with track record for profitable growth
- Low competitive pressure with smaller local and few international competitors

### **Establishing a leading position... …in a growing market with a predictable regulatory framework…**

- SMS the primary communication channel with 76% market penetration<sup>1</sup>
- Strong regulatory framework and predictable market conditions
- Growing digital economy with demand for scalable communication solutions

### **…and substantial opportunities for synergies and accelerated growth**

- Grow SME customer base and expand into underpenetrated sectors
- Introduce high-margin CPaaS products, addressing local market demand
- Integrate SMSPortal tech platform into LINK's existing operations

**Advanced technological platform, robust enterprise customer base, and solid market opportunities present strong strategic alignment with LINK's business model and growth priorities**

(1) Source: MEF and Biz | Market Penetration is defined as the number of active SMS users in a country divided by the total population of the country.

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