Tuesday, April 18, 2017

Ekinops and OneAccess Plan Merger

Ekinops based in Lannion, France, a global supplier of next-generation optical networking equipment, and the major shareholders of OneAccess, a provider of network access solutions, announced that they have entered into exclusive discussions for a combination of their operations, with the proposed transaction to involve the acquisition of OneAccess by Ekinops.

The combination of the two companies would create a major player in transport solutions, Ethernet services and business routing sectors with combined annul revenue of over Euro 76 million (based on data for 2016).

As an initial step, Ekinops and OneAccess will consult with their employee representative organisations, with a view to finalising negotiations once the opinions of those organisations have been received.

Under the terms of the proposed acquisition, OneAccess' enterprise value is estimated at Euro 60 million, or approximately 1x revenue, representing an equity value of Euro 58 million. Ekinops plans to fund acquisition through a combination of cash and shares, as a part of which it would implement a capital increase for the equivalent of approximately 50% of OneAccess' equity capital, with this transaction subject to approval by its shareholders.

Subject to shareholder approval, on completion of capital increase transaction, OneAccess' shareholders would contribute all of their shares in exchange for 50% of the value in cash and 50% in Ekinops shares. The new Ekinops shares would be priced at the average share price, weighted by volume, of Ekinops shares on Euronext between 30 March and 15 April 2017, but within the range Euro 7.25 and Euro 8.21. On completion of the transaction, OneAccess shareholders would own 20%-25% of the new company.
In addition, an earn-out payment based on revenue generated of not more than Euro 6 million would be paid to OneAccess shareholders for the 2017 and 2018 fiscal years.

France-based OneAccess, founded in 2001 and with around 350 staff, is a supplier of software and hardware platforms to telecom carriers and service providers serving large corporate and SME customers. The company claims nearly 130 telecom carriers as clients, including 29 in the global Top 100, and has four R&D centres, located in Velizy and Sophia Antipolis, France, Louvain, Belgium and Bangalore, India. In 2016, OneAccess generated revenue of Euro 58 million and EBITDA margin of 9.1%.

Through combining their operations, Ekinops and OneAccess would establish a major global supplier of optical transport and telecom network virtualisation solutions. The new company would have a total workforce of over 400 employees and combined revenue of Euro 76 million, with around 55% sales generated outside of France.

The transaction is currently expected to be completed during the summer of 2017.

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