BATM Advanced Communications Ld BATM enters option agreement to sell NGSoft (3160L)
January 12 2021 - 01:00AM
UK Regulatory
TIDMBVC
RNS Number : 3160L
BATM Advanced Communications Ld
12 January 2021
LEI: 213800FLQUB9J289RU66
12 January 2021
BATM Advanced Communications Limited
("BATM" or "the Group")
BATM enters option agreement to sell NGSoft for c. $33m
Disposal of legacy software services subsidiary to generate
funds for acceleration of core activities
BATM (LSE: BVC; TASE: BVC), a leading provider of real-time
technologies for networking solutions and medical laboratory
systems, announces that it has entered into an option agreement
(the "Option Agreement") to sell NG Soft Ltd. ("NGSoft"), a
subsidiary of the Group, for NIS 105.1m (approximately $33m) in
cash to Aztek Technologies (1984) Ltd., a provider of ICT cloud
services in Israel and a portfolio company of SKY Fund (the
"Buyer").
Background to the transaction
BATM is focused on core areas of activity, underpinned by the
Group's portfolio of intellectual property, that it expects will
offer transformational growth opportunities in both its Networking
& Cyber and Bio-Medical divisions. In particular, in 2020, the
Group achieved fundamental milestones in progressing the
development of its network function virtualisation ("NFV")
activities, including a successful proof-of-concept of its NFVTime
solution with Vodafone and securing its first tier 1 customer with
a multi-year licensing agreement. In medical diagnostics, the
Bio-Medical division rapidly produced multiple solutions in
response to the COVID-19 outbreak that are experiencing substantial
demand as the global pandemic continues.
As previously stated, BATM continuously seeks opportunities to
unlock shareholder value from Group subsidiaries that are
considered non-core to the future of the Group. NGSoft is a
software and digital services company that provides creative
digital and technology solutions. Its development activities do not
include any of the Group's NFV or cyber solutions. Accordingly, the
Board believes that it would be in the best interests of BATM and
of all shareholders to generate value from the sale of NGSoft and
invest the proceeds to accelerate the Group's core activities in
accordance with its strategic plan.
Terms of the transaction
Under the terms of the Option Agreement, BATM has the option,
but not obligation, to sell the entire issued share capital of
NGSoft for a total cash consideration of NIS 105.1m (c. $33m), of
which the Group would receive a total of NIS 93.7m (c. $29m). The
Group's consideration includes a NIS 15.5m loan repayment from
NGSoft and a NIS 2.1m dividend payment, both to be received upon
the exercise of the option. Certain employees of NGSoft would
receive the balance of NIS 11.4m through cash out of their employee
options and rights on completion.
In the event that the option is exercised by BATM, a share
purchase agreement would be entered into - the final form of which
has been agreed with the signatory pages being held in escrow by a
trustee who would be required to release them upon being served
with a notice of exercise of the option. The Buyer only has the
right to terminate the agreement in the event of a material adverse
change in the trading of NGSoft.
The Group's option is exercisable up to and including 1 March
2021, which, in accordance with the terms of the Option Agreement,
can be extended by the Group to 17 May 2021 under certain
predefined circumstances. If the Group does not exercise its
option, it will be required to pay the Buyer a consideration of up
to NIS 7.9m in cash.
The Group will update the market in due course.
Enquiries:
BATM Advanced Communications
Dr Zvi Marom, Chief Executive Officer +972 9866 2525
Moti Nagar, Chief Financial Officer
Shore Capital
Mark Percy, Anita Ghanekar, James Thomas (Corporate Advisory)
Henry Willcocks (Corporate Broking) +44 20 7408 4050
Luther Pendragon
Harry Chathli, Claire Norbury +44 20 7618 9100
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