MTI Wireless Edge Acquires 50% of Company VAR Parkland Australia.
M2 EQUITYBITES-June 27, 2019-MTI Wireless Edge Acquires 50% of Company VAR Parkland Australia
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27 June 2019 - Israeli communication and radio frequency solutions group MTI Wireless Edge Ltd's (AIM: MWE) Mottech Water Solution Ltd subsidiary has entered into a share purchase agreement to acquire 50% of Parkland Australia the, a value added reseller of Mottech's solutions in Australia, the group said.
Parkland Australia's revenue for the year ended June 30, 2018 was 2.1m AUD (USD 1.45m). Profit before tax for Parkland during the year ended June 30, 2018 was 0.24m AUD (USD 0.16m).
The company has a balance sheet including shareholders' equity of 0.92m AUD (US USD0.63m), including net cash of 0.4m AUD (US USD 0.27m).
Parkland has seven employees in Australia.
MTI said the acquisition provides it a platform to expand business strategy and increase its recurring revenue from service and maintenance of water control systems.
Consideration will be funded out of MTI's existing cash resources.
MTI expects to be able to increase its recurring revenues from Parkland Australia's operation following completion of the acquisition.
The total consideration for the acquisition is up to 0.8m AUD (approximately USD 0.55m).
Of the total consideration, 0.6m AUD (USD 0.41m) will be paid upon closing (anticipated within 30 days), and a total of up to 0.2m AUD will be paid in two tranches by July 2020 and July 2021 based on the financial performance of Parkland Australia in FY 2020 and FY 2021 (ending 30 June 2020 and 2021, respectively) relating to revenue targets being achieved by the end of each financial year.
The vendor of Parkland Australia is Parkland Products Ltd., a company incorporated under the laws of New Zealand which acts as Mottech value added reseller in New Zealand.
Under the terms of the acquisition agreement both Mottech and Parkland Products Ltd. have options to acquire each other's shareholding in Parkland Australia in certain circumstances.
The acquisition consideration is to be funded out of MTI's existing cash resources.
Headquartered in Israel, MTI is a technology group focused on comprehensive communication and radio frequency solutions across multiple sectors.
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|Publication:||M2 EquityBites (EQB)|
|Date:||Jun 27, 2019|
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