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eServGlobal Limited Investor Presentation Proposed Sale of USP Assets to Oracle Corporation May 2010 PowerPoint Presentation
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eServGlobal Limited Investor Presentation Proposed Sale of USP Assets to Oracle Corporation May 2010. Table of Contents. Transaction Overview Transaction Rationale eServGlobal Post Transaction Profile and Strategy Guidance Update Capital Management Review. Transaction Overview: Key Terms.

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slide1

eServGlobal Limited

Investor Presentation

Proposed Sale of USP Assets to Oracle Corporation

May 2010

table of contents
Table of Contents
  • Transaction Overview
  • Transaction Rationale
  • eServGlobal Post Transaction Profile and Strategy
  • Guidance Update
  • Capital Management Review

eServGlobal Investor Presentation | 2 | Proprietary and Confidential

transaction overview key terms
Transaction Overview: Key Terms

eServGlobal has agreed to sell its USP platform (which accounted for 42% of eServGlobal revenue in FY2009) to Oracle Corporation by way of an asset sale

The purchase price is up to USD$93.75 million (AUD$113.4 million; £65 million at current exchange rates) which compares to a total capitalisation of eServGlobal on the 26th of May of AUD$88.6 million (£51.2 million)

It is a 100% cash offer

Approximately 22% of the Purchase Price (US$20.75 million; AUD$25.1 million; £14.4 million) will be held in escrow of which 50% will be released after 12 months and the remaining 50% after 24 months. The escrow amount is in consideration of the warranties and indemnities provided to Oracle under the APA. The release of funds from escrow is in no way dependent on the performance of the assets sold to Oracle post completion

eServGlobal Investor Presentation | 3 | Proprietary and Confidential

transaction overview key conditions
Transaction Overview: Key Conditions
  • Shareholder Approval
  • Obtaining the consent of third parties (including customers) to the transfer of rights and obligations under the APA
  • Execution of non-competition agreements by various employees
  • Execution and delivery of numerous ancillary documents including intellectual property assignment, transitional services agreement, sub-contract agreement, intellectual property agreement

eServGlobal Investor Presentation | 4 | Proprietary and Confidential

transaction overview usp assets
Transaction Overview: USP Assets
  • USP IP
    • ChargingMax
    • NumberMax
    • uVOMS
  • 25+ USP customers
  • The property leases for
    • Ipswich (UK)
    • Wellington (NZ)
    • Diegem (Brussels)
  • USP fixed assets (servers, laptops etc)
  • Approximately 200 employees
  • MessageMax
  • Social Relationship Management
  • PromoMax Express

FY09 Revenue

USP

42%

non - USP

58%

eServGlobal Investor Presentation | 5 | Proprietary and Confidential

the transaction scope products
The Transaction Scope: Products

eServGlobal General Presentation | 6 | Proprietary and Confidential

transaction rationale why sell the usp assets to oracle now
Transaction Rationale: Why sell the USP assets to Oracle now?
  • Having built, implemented and developed a world leading pre-paid charging platform, the company recognises that telecom operators are progressively looking for suppliers to provide ‘convergent billing’ solutions (meaning both prepaid and post paid billing) in a single offer. Without a post paid solution we can not independently provide convergent billing
  • We are dependent on post paid billing partners (e.g. Oracle) when selling to tier one Telecom Operators
  • Oracle is a natural acquirer of this segment of our business. Our USP platform is built on Oracle tools, database and runs on Oracle hardware
  • The Board and Management consider the Purchase Price to incorporate a sufficient premium to reflect the strategic value of our world leading USP assets and business
  • The business retained by eServGlobal has exciting prospects and will further benefit from managements complete attention
  • The Non-USP business is independent of the USP assets and the transaction will not diminish eServGlobal's ability to deal with the Telecom Operators in relation to the retained products
  • By separating out the three distinct business units (USP, m-Money & VAS and HomeSend) we believe investors will be able to better understand and value the business

eServGlobal Investor Presentation | 7 | Proprietary and Confidential

the new eservglobal strong value proposition
The New eServGlobal: Strong Value Proposition
  • Specialising
    • in m-Money and Value Added Services
  • Investing
    • in the Future of our Products
  • Transitioning
    • to the Next-Generation Technology
  • Delivering
    • Software as a Service (SaaS) model and License Alternatives
  • Accelerating
    • Time to Market with Agile Solutions

60+ Customers in 45+ Countries

60+ Customers in 45+ Countries

24 years experience in payments, promotions and Value Added Services

24 years experience in payments, promotions and Value Added Services

One of the largest implemented Mobile Payments customer bases globally

One of the largest implemented Mobile Payments customer bases globally

eServGlobal Investor Presentation | 8 | Proprietary and Confidential

the new eservglobal eservglobal assets going forward
The New eServGlobal: eServGlobal assets going forward

60+ Customers and 300+ employees

The HomeSend Platform

HomeSend: Global hubbing service offering cross border person-to-person transfers of Money, Air Time and Roaming Recharge

The Mobile Money Platform

PayMobile: Unified solution for mobile payment, m-wallet, m-Commerce and peer to peer mobile money transfer

The Value Added Services Platform

PromoMax: Carrier grade solution for Telecom Operators to build targeted, personalised, diversified and timely promotions and loyalty programs

FlexiContent: Rapid application development environment allowing operators to offer innovative content and two way message-based services

Value Added Services Platform: Carrier grade messaging and value added services platform with specific features for Mobinil’s environment

MSP: Carrier grade, open standard Messaging Services Platform

Mailis: Flexible, modular and scalable solution enabling service providers to deliver Voice Mail, Unified Mail and Video Mail to both retail and business customers

UIP: eServGlobal’s highly scalable and multi-lingual IVR solution

eServGlobal Investor Presentation | 9 | Proprietary and Confidential

slide10

The New eServGlobal:

Specialising in Mobile Money and Value Added Services

eServGlobal Investor Presentation | 10 | Proprietary and Confidential

slide11

Mobile Money: Market Statistics

  • By 2012 1.7 billion people in emerging markets will have a mobile phone but no access to banking services.
  • By 2012, 360 million people without traditional bank accounts will use mobile money.
  • By that year, the opportunity could generate $5 billion annually in direct revenue, and an additional $3 billion annually in indirect revenue.

McKinsey, Feb 2010

  • Mobile Money user ARPU is 40% higher than non-user ARPU.

CGAP Brief, Dec 2009

  • Significant churn reductions – 6x according to one operator.

Informa Mobile Money and Payments Report, 2009

  • By 2015, 3 – 15 percent of the international money transfers currently handled by various formal or informal agent networks will be carried out using a mobile handset, generating US$ 1.2 – 6.2 billion in service revenues.

Berg Insight, April 2010

eServGlobal Investor Presentation | 11 | Proprietary and Confidential

slide12

The New eServGlobal: Business Strategy

  • Build more predictable annuity revenue streams by providing SaaS alternatives, in addition to the current licensing models
  • Consolidate functionality across platforms and provide a common user interface
  • Remain focused on developing, supporting and providing our customers the personalisation they need, while accelerating their time to market with agile solutions built for fast deployment, flexibility and adaptability
  • Continue to reinvigorate our indirect sales channels
  • Evolve headcount and locations to reflect the new requirements of the business and maintain our competitive position
  • Continue to invest in the HomeSend platform

eServGlobal Investor Presentation | 12 | Proprietary and Confidential

slide13

FY10 Guidance Update

  • The proposed sale of the business impacts company performance and new guidance is to be issued
    • Transaction timing is likely to lead to the deferral of purchases at year end by key USP customers
    • Year end is traditionally where much of our license revenue is generated
    • FX has additionally negatively impacted revenue by AUD$12-14 million
  • The profit (based on current exchange rates and after potential purchase price adjustments and transaction fees) arising from the transaction is in excess of AUD$103 million (£60.7 million)
  • As a result of the above factors the Board now believes that FY2010 revenue will be in the range of AUD$77 million to AUD$82 million (£43.4-£46.2 million) (FY2009: AUD$147.2 million, £85.1 million)
  • Overall FY2010 EBITDA (before non recurring restructuring and foreign exchange losses) will be in the range of AUD$90 million to AUD$95 million (£52 - £54 million) (FY2009: AUD$2.4 million) (£1.4 million) having regard to both FY2010 operating activities and the sale of the USP Business and assets

eServGlobal Investor Presentation | 13 | Proprietary and Confidential

slide14

FY11 Guidance Update

  • Post transaction, FY2011 will be a year of transition where we will focus on growing the remaining non-USP businesses
  • Both the HomeSend platform and the Value-Added Services platform represent exciting growth opportunities, albeit they are at varying stages of development and revenue generating potential
  • Management expects to grow both revenue and earnings progressively over the medium to long term
  • Board believes it can achieve revenue in the range of AUD$38 million to AUD$45 million (£22-£26 million) and generate positive EBITDA (before non-recurring restructuring charges) of up to AUD$5 million (£2.9 million)

eServGlobal Investor Presentation | 14 | Proprietary and Confidential

slide15

Capital Management Review

  • Following completion, the Board will conduct a capital management review which will consider the extent to which the cash proceeds in relation to the transaction are excess to the Company’s requirements going forward, having regard to:-
    • the business plan associated with the remaining non-USP business over the medium term, including capital investment, restructuring and working capital requirements associated with a more focussed and slimmed-down business
    • the Company’s existing credit facilities
    • the Company’s current and possible obligations to Ocean with respect to the Asset Purchase Agreement
  • To the extent the Board considers that a portion of the sale proceeds is in excess to the Company’s requirements, it will also investigate the most efficient form of distribution to shareholders, which may in turn require shareholder approval
  • No determination in this regard has been made by the Board at this time.
  • The Board expects to update shareholders in relation to its capital management review during the first half of the 2011 financial year

eServGlobal Investor Presentation | 15 | Proprietary and Confidential