JSE-listed Blue Label Telecoms has entered into an agreement to acquire a 75% stake in mobile content and value-added services provider Via Media for an initial consideration of R144.38-million, as well as additional amounts.
Blue Label expected the acquisition to afford the company access to new channels for the distribution of Via Media and Blue Label products and services.
In addition to the R144.38-million to be paid to Via Media holding company Malik Investment Holdings, Blue Label would also pay additional amounts of up to R103.13-million if warranted profits were achieved by Via Media during a 36-month warranty period.
If the warranted profits were not achieved, the additional payments would be abated on a pro rata basis. If, however, the warranted profits fell below an agreed threshold, Blue Label would have the right to put its shares to the vendors for a refund of all payments made plus interest thereon.
Meanwhile, an additional R112.5-million, or part thereof, would also be payable by Blue Label if stretched targets, over and above the warranted accumulated profits, were achieved by Via Media.
Blue Label would fund the acquisition from its cash resources.