April 20, 2021 (MLN): TRG Pakistan Limited, in an announcement to Exchange, said that its associate, TRGIL, has entered into a definitive agreement to sell all of its economic stake in its health insurance marketing subsidiary (“the Company”) to a leading US-based marketing company active in the insurance and financial services industry.
According to the notice sent by TRG Pakistan, the key financial terms of the transaction are as follows:
- The total enterprise value of the Company is $600 million
- The estimated implied equity value at closing is $450 million that is based on estimated net debt and estimated net working capital at closing, and net of estimated transaction expenses.
- The estimated consideration for TRGIL is $309 million that includes the purchase price escrow and $15 million in note payable one year after closing
In addition to the above consideration, there is a potential earn-out of up to $35 million payable to TRGIL over the next two years, contingent on the successor Company meeting certain financial targets in 2021 and 2022.
The transaction is subject to regulatory approvals and other closing conditions and is targeted to close no earlier than 1 July 2021. TRG Pakistan’s prorated stake at closing, excluding any earn-out and prior to net debt adjustment at TRGIL, will be approximately Rupees 21.5 billion, the notice said.
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