With the acquisition of iTouch, Buongiorno has become the world’s No. 1 provider of mobile entertainment, with 38 offices conducting business in 53 countries, direct connections to more than 100 telecoms carriers throughout the world, and with access to over 2 billion mobile users. It also ranks among the top three mobile entertainment companies in 8 of its largest markets.
Based on pro-forma results, including iTouch, revenues for 2007 are expected to amount to between €315 and €325 million, and EBITDA between €36 and €38 million. For 2008, Buongiorno projects revenues of between €330 and €350 million and EBITDA between €41 and €45 million. EBITDA margin is expected to grow from 11.6% in 2007 to 12.6% in 2008. The Company has also set itself the target of achieving overall yearly savings of €10 million from the integration with iTouch by the first half of 2009. Buongiorno paid part of the acquisition in cash for €73.7 million, thanks to a new loan of €115 million from Banca IMI S.p.A. (Intesa Sanpaolo Group) and issued to iTouch shareholders 15,394,186 shares of a nominal value of €4,002,488.36 at a current countervalue of €29,418,289.45, coming from the share capital increase fully subscribed and paid up through a Contribution in Kind of iTouch shares in accordance with sections 2440 and 2441 of the Italian Civil Code.
The purchase agreement is subject to the lock-up agreement for iTouch shareholders related to the shares issued in their favour executing the capital increase. The lock-up period has been set at different duration terms and conditions according to each iTouch shareholder and will last a maximum time between 90 and 180 days after the day of the completion of the acquisition.
Mr Andrea Casalini, CEO of Buongiorno comments, “With the completion of the iTouch acquisition, Buongiorno is now the leading company worldwide in the mobile-entertainment market, with an international presence and a team in place that is unrivaled in the industry. The integration of iTouch has enabled us to further our investment into new ideas and new products, articularly with web and mobile convergence services, while also improving profitability through various cost synergies. Therefore, we are confident that we can achieve the targets we have set for 2008, and that our growth will continue to accelerate in the years to come
Report as required by section 2343, subsection 3 of the Italian Civil Code without making any changes to the estimate. In the absence of any grounds to alter the valuation as a result of the above check, the shares were released from the restriction imposed by subparagraph 1 of the above section. Following publication of the Prospectus on 28 December 2007, they became eligible for trading on the Italian electronic share market (MTA).
The Buongiorno team which managed the deal was led by the CFO Carlo Frigato. Bonelli Erede Pappalardo acted as legal advisor, UBS Investment Bank and Banca IMI as financial advisors to Buongiorno. Simmons & Simmons and Finn, Dixon & Herling acted as legal advisors to iTouch. Pursuant to the tasks entrusted to it by the Extraordinary Shareholders’ Meeting of May 2, 2006, the Board of Directors resolved to cancel n. 534,000 options no more exercisable and authorized the assignment of 2,225,000 options to 31 managers and employees under the Company’s incentive and employee loyalty policies at the exercise price of Euro 1.94 each, subject to the procedures for determining the price, as approved by the General Meeting. While the assignment of stock options is immediate, entitlement to the exercise thereof is gradual starting from next year over the next three years.
The option granting for seven of the senior managers will be conditional on them acquiring a certain number of Buongiorno shares, proportional to their individual granting, and committing to maintain them for a period of three years.
Pursuant to paragraph 2 of Article 154-bis of the Italian Consolidated Financial Law (TUF), Carlo Frigato, in his capacity as the Executive responsible for preparing the Company’s accounting documents, certifies that the information contained herein corresponds to documented results and accounting books and records.
