Acquisition strengthens digital experience
monitoring opportunity and adds to monthly recurring
revenue.
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OTTAWA, May 29, 2020 /CNW/ - Martello Technologies
Group Inc., ("Martello" or the "Company") (TSXV: MTLO), a
provider of digital experience monitoring (DEM) solutions deployed
in more than 5,000 enterprise networks around the world, today
announced that it has completed the acquisition of GSX
Participations SA ("GSX"), a provider of end-user experience
monitoring for Microsoft Office 365 (the "Transaction"). All
conditions required to close the Transaction have been met.
Further to its press release dated April
28, 2020, Martello has acquired 100% of the shares of GSX,
which is headquartered in Geneva,
Switzerland with more than 400 enterprise customers
globally. The consideration for the acquisition was 22,000,000
common shares and CDN$13,860,000
cash for an aggregate purchase price of $18,370,000.
The acquisition of GSX, recognized by Gartner as a digital
experience monitoring vendor, extends Martello's DEM capabilities
into the Microsoft Office 365 market, which has approximately 200
million monthly active users. Based on unaudited financial
statements prepared by GSX for the year ended December 31, 2019, GSX generated FY2019 revenues
of €4.4M (approximately CDN$6.6M),
89% of which were recurring, while billings from sales of Microsoft
Office 365 digital experience monitoring increased by 34% in
FY2019.
Martello has closed debt financing concurrent with the closing
of the Transaction. A US$8M
subordinated secured term loan provided by Vistara Capital Partners
has partially funded the acquisition of GSX. As previously
announced, Martello has also entered into a credit agreement with
National Bank of Canada for a
$7.5MM secured revolving facility,
which the Company expects will close by June
1. Additional information about the transaction and the debt
financings above are detailed in the press release dated
April 28, 2020.
In addition, on May 26, 2020,
Martello closed a $6.9 million bought
deal public offering led by PI Financial Corp. and Eight Capital as
co-lead underwriters and Paradigm Capital Inc. on behalf of a
syndicate of underwriters. This was pursuant to a short-form
prospectus filed on May 20, 2020,
which is available on SEDAR. More information on the bought deal is
detailed in the press releases dated May 6,
2020 and May 26, 2020.
"GSX brings a technology and business that is accretive to
Martello's objectives of increasing monthly recurring revenue and
investing in digital experience monitoring solutions", said
John Proctor, President and CEO of
Martello. "As global businesses shift to a remote work model, the
performance of cloud digital services like Microsoft Office 365 has
become even more critical. I appreciate the vision of our lenders,,
who haverecognized this significant opportunity and provided
financing despite uncertain market conditions. As we begin the
integration process, I'm pleased to welcome the GSX team to the
Martello family".
Oak Hill Financial will receive a fee of $175,000 for advisory services in connection with
the debt financings from Vistara Capital Partners and National
Bank.
Investor Call
Martello President and CEO
John Proctor and CFO Erin Crowe will
host a conference call for investors and analysts on Monday, June 1, 2020 at 10:00 AM EST, featuring Antoine Leboyer, the General Manager and former
CEO of GSX. The call will provide insight into the strategic
rationale for the GSX acquisition and a question and answer period
for analysts.
Date: Monday, June 1, 2020
Time: 10:00 AM EST
Canada/USA Toll Free: 1-800-319-4610
International Toll: +1-604-638-5340
Callers should dial in 5 – 10 min prior to the scheduled start
time and simply ask to join the Martello call.
An audio recording of the call will be available on June 1, 2020 at martellotech.com.
About Martello Technologies Group
Martello Technologies Group Inc. (TSXV: MTLO) is a technology
company that provides digital experience monitoring (DEM)
solutions. The company develops products and solutions that provide
monitoring and analytics on the performance of real-time
applications on networks, while giving IT teams and service
providers control and visibility of their entire IT infrastructure.
Martello's products include unified communications performance
analytics software, and IT analytics software. Martello
Technologies Group is a public company headquartered in
Ottawa, Canada with offices in
Montreal, Amsterdam, Paris, Dallas
and New York. Learn more at
http://www.martellotech.com
This press release does not constitute an offer of the
securities of the Company for sale in the
United States. The securities of the Company have not been
registered under the United States Securities Act of 1933, (the
"1933 Act") as amended, and may not be offered or sold within
the United States absent
registration or an exemption from registration under the 1933
Act.
This press release shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of
the securities in any state in which such offer, solicitation or
sale would be unlawful.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this news
release.
Cautionary Note Regarding Forward-Looking
Statements
This news release contains "forward-looking statements".
Forward-looking statements can be identified by words such
as:"anticipate," "intend," "plan," "goal," "seek," "believe,"
"project," "estimate," "expect," "strategy," "future," "likely,"
"may," "should," "will" and similar references to future periods.
Examples of forward-looking statements include, among others,
statements we make regarding accretive monthly recurring revenues
and effect of closing on the Company's gross margins.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the following:
- Continued volatility in the capital or credit markets.
- Our ability to maintain our current credit rating and the
impact on our funding costs and competitive position if we do not
do so.
- Changes in customer demand.
- Disruptions to our technology network including computer
systems and software, as well as natural events such as severe
weather, fires, floods and earthquakes or man-made or other
disruptions of our operating systems, structures or equipment.
- Delayed purchase timelines and disruptions to customer budgets,
as well as Martello's ability to maintain business continuity as a
result of COVID-19.
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based only on information currently available to us and speaks only
as of the date on which it is made. Except as required by
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update any forward-looking statement, whether written or oral, that
may be made from time to time, whether as a result of new
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SOURCE Martello Technologies Group