LINK Signs Term Sheet Regarding Acquisition of Teracomm Companies

OSLO, Norway, Feb. 26, 2018

LINK Mobility Group ASA ("LINK"), one of Europe's leading and fastest growing providers of B2C mobile messaging and mobile services, has entered into a term sheet regarding the acquisition of South-Eastern European mobile messaging activities currently owned by Allterco JSCo ("ALLTERCO") and operated by TERA COMMUNICATIONS AD, TERAVOICE EAD, ALLTERPAY EOOD, TERACOMM RO SRL and TERA COMMUNICATIONS DOOEL (together the "Teracomm Companies")

The Teracomm Companies are among the leading providers of mobile services in the region, offering sound technical solutions to respond to the business needs of its clients and partners.

"I am really happy to announce that we have signed a firm term sheet to acquire the Teracomm Companies. This is our second investment in South-Eastern Europe and the fit between Voicecom and the Teracomm Companies is very good. We will now have a solid platform to develop and grow LINK further in the region through our strong sales focus and innovation of mobile messaging and solutions services. The South-Eastern European market is experiencing strong underlying growth and we really look forward to take a big slice of this growth going forward," says Arild E. Hustad, CEO of LINK.

"Based on our attitude to offer our clients the best technical solutions and thanks to our team of professionals, the Teracomm Companies have become reliable business partners and have conquered stable positions in the market of mobile services. The sustainable growth in the recent years has paid back. However, based on the results of the IoT business and the interest of the investors in this field, at this point of time, the sale of the European part of our telecommunication business is assessed as an opportunity to change the focal point of ALLTERCO's business and to concentrate our resources fully on the development of IoT products and services," says Dimitar Dimitrov, CEO of ALLTERCO.

The agreed enterprise value of the transaction is EUR 8.8 million, on a cash-free and debt-free basis and assuming a normalized level of working capital. The enterprise value is based on a normalized pro forma consolidated EBITDA for 2017, currently estimated at EUR 1.6 million, multiplied by a factor of 5.5. The Teracomm Companies expect to report revenues for 2017 of Euro 11.9 million.

The purchase price under the transaction, subject to customary adjustments, is expected to be settled as follows: