Route Mobile shares dip as promoters to divest 58% stake for ₹5,922 cr

Shares of Route Mobile jumped over 0.56% today after its promoters approved to sell a majority stake to Belgian telecom service provider Proximus Group. The CPaaS services provider, in a stock exchange filing, says Proximus Group will acquire a 58% stake in Route via Proximus Opal for an initial ₹5,922.4 crore cash consideration at ₹1,626.40 apiece.

The stock, meanwhile, opened a gap down at ₹1,485.15 on the BSE, and surged to an intra-day high of ₹1,548.20. At the current share price, the market cap of the company stands at ₹9,236.29.

"Some of the founding shareholders of Route Mobile will reinvest in a minority stake in Proximus Opal, a subsidiary of the Proximus Group and the holding company of Telesign, Proximus’ US-based affiliate," the company adds.

Once the transaction closes, the CPaaS activities of the group will be led by Rajdip Gupta, CEO of Route Mobile, the company adds.

The company says geographically, Route Mobile’s footprint in the Indian subcontinent, Africa, Asia-Pacific, and Latin America, complements Telesign’s presence in Europe and North America. Telesign is Proximus’ US-based affiliate, which provides solutions to prevent fraud and secure communications.

The acquisition of the majority stake in Route Mobile will trigger a mandatory takeover offer for up to 26% of the total shares outstanding of Route Mobile at the same price per share. Depending on the outcome of the mandatory takeover offer, the stake held by Proximus Opal could further increase to around 75% of Route Mobile’s shares.

The acquisition of the majority stake in Route Mobile and the MTO will be followed by a reinvestment of EUR 299.6 million by some of the founding shareholders of Route Mobile, for up to 14.5% of the shares of Proximus Opal. The reinvestment by some of the founding shareholders of Route Mobile implicitly values Telesign at EUR 1.4 billion, the company adds.

"Taking into account the reinvestment, the net cash consideration for Proximus prior to MTO amounts to EUR ~343.4 million," the company adds. Rajdip Gupta, CEO of Route Mobile, says the partnership with Telesign paves the way for Route Mobile to become "one of the global CPaaS leaders" and achieve a billion-dollar annual revenue run rate much sooner than the anticipated 3-4 years timeframe.

Joe Burton, CEO of Telesign, says the company's mission at Telesign is to create a trustworthy place for everyone in the digital space. Proximus Group CEO Guillaume Boutin says the acquisition of a majority stake in Route Mobile is a transformational step for our international CPaaS and digital identity activities.

Proximus expects to close the transaction within the next six to nine months, and will finance the deal through bridge financing, followed by the issuance of a new bond upon closing of the transaction.

Route Mobile offers omnichannel communication solutions to its customers, including notably automated SMS or WhatsApp notifications for order updates, appointment reminders, and promotions, as well as voice-based and email solutions, appointment reminders and promotions, as well as voice-based and email solutions.

For 2022-2023, Route Mobile reported revenue worth ₹3,569.2 crore, while the EBITDA stood at ₹456.6 crore.