MVNE Pareteum has agreed to buy global Wi-Fi provider iPass in an all stock transaction. Pareteum said the acquisition will give it new marquee brands and markets including the enterprise, airline, hospitality, retail and internet of things (IoT) sectors, as well as over over 40 US and international patents. After the deal, the company said it will have over 500 new customers and a global network of over 68 million Wi-Fi hot spots, plus new offices and personnel in Silicon Valley, California and Bangalore, India.
Under the deal, each iPass shareholder will get 1.17 shares of Pareteum stock for each of their own shares. The transaction is expected to be immediately accretive to Pareteum's adjusted earnings per share and free cash flow, after anticipated synergies. Pareteum sees cost synergies of over USD15 million per year, including USD 12 million in the first full quarter of combined operations. For the first full year after combination, Pareteum forecasts USD 2.0 million of earnings accretion and USD 5.5 million of adjusted earnings accretion.
The exchange offer is subject to customary conditions, including the tender of most iPass shares, plus certain regulatory approvals, and is expected to close in the first quarter of next year. No approval of Pareteum shareholders is required. The terms of the agreement have been approved by the board of directors at both companies.
