TORONTO, July 3, 2018 /CNW/ - Dealnet Capital Corp. ("Dealnet" or the "Company") (TSX VENTURE: DLS), announced today that it has signed a binding agreement to sell all of the issued and outstanding shares of Impact Mobile Inc. ("Impact Mobile"), the Company's wholly-owned mobile messaging business, for total cash consideration of $27.5 million to IMImobile Canada Inc., a wholly-owned subsidiary of IMImobile PLC.
Approximately $25 million of the total consideration is payable on the closing of the transaction, which is expected to be before July 19, 2018. The balance of the purchase price is due six months from the closing date. On closing of the transaction, the Company's $12 million of senior secured debentures will be redeemed in full.
"IMImobile is the ideal home for Impact Mobile as the two companies operate complementary businesses and together can be expected to leverage their respective messaging capabilities and technologies. We wish our colleagues at Impact Mobile great success as they join the IMImobile family," said Brent Houlden, Dealnet's President and CEO.
In early 2018, Delanet Capital made a strategic decision to focus on its core consumer finance business and to monetarize its investment in Impact Mobile. The net proceeds from the sale of Impact Mobile, after retiring the senior secured debentures, will be used to fund the growth of the Company's consumer finance business.
"This transaction is transformational for Dealnet as it adds capacity and flexibility to our balance sheet, improves management's ability to focus on our core business and puts the Company back in a position of strength to accelerate the growth of our consumer finance business and achieve profitability by the end of 2018," added Mr. Houlden.
The Company expects to report an after-tax gain of approximately $24 million on the transaction which will increase the Company's tangible net worth to approximately $37 million and significantly reduce its leverage ratio. The Company's post-closing balance sheet will fully support the Company's aggressive growth targets.
The Company retained a financial advisor to assist with the sale process for Impact Mobile. The financial advisor will be entitled to a transaction fee of $825,000.
About Dealnet Capital Corp.
Dealnet is a specialty finance company servicing the $20 billion Canadian home improvement finance market through both dealer-based and direct homeowner-based originations of secured finance assets (equipment leases and loans). The company earns net finance income over the term of these assets and from fee income derived from the transaction support services that it provides to its dealer network. The Company also uses its live engagement platform, One Contact Communications, to provide customer support services on a contract basis to third-party institutions.
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This news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "would", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the information is provided and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's Management's Discussion and Analysis. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking information.
SOURCE Dealnet Capital Corp.
For further information: Brent Houlden, Chief Executive Officer, (905) 695-8557 ext.1145, firstname.lastname@example.org; John Sadler, Senior Director - Corporate Communications, (905) 695-8557 ext. 1348, email@example.com