Online retailer buys Data Select’s SIM business and web media agency as part of plans to build global name in the world of online technology retail
Online retailer Expansys intends to “exploit a number of strategic opportunities” after agreeing to acquire the entire issued share capital of Data Select Network Solutions (DSNS) and PJ Media.
Expansys has put pen to paper on a £49 million deal for the two firms, both controlled by entrepreneur Peter Jones, including £38 million for the businesses and £10.8 million of debt owed by DSNS. The £38 million will be satisfied by an aggregate cash payment of approximately £13.4 million and the issue of up to 442,364,707 consideration shares to relevant vendors.
It is proposing to raise £30 million though the placement of 535,714,286 ordinary shares at 5.6p per share on the Alternative Investment Market (AIM), part of which will be used to fund the purchase. Mobile News understands there are a number of large companies interested in buying eXpansys shares through the offering. The shares are due to start trading on July 26.
DSNS is distributor Data Select’s SIM card business, while PJ Media is a web media agency.
Due to the size and relative value of DSNS in relation to Expansys, the deal constitutes a reverse takeover of the online retailer under AIM rules. As such, it requires existing shareholder approval, which will be sought at an Expansys general meeting on July 23.
Expansys said the deal for DSNS and PJ Media is part of a grander plan to “build a global online technology superstore”, and it has restructured its board to suit.
Peter Jones’s shareholding in Expansys has fallen from 75 per cent to 43 per cent, and he has joined the board as non-executive deputy chairman. Former Yell and Merrill Lynch EMEA chairman Bill Wigley has joined the board as non-executive chairman.
The growth into a global online consumer technology retailer will be funded through the rest of the money raised with the AIM offering.
Expansys has been undertaking an internal review since January to develop a focussed vision and strategy. This has highlighted strategic acquisitions to create scale as a key development, growing its products, competences, commercial relationships and customer base.
DSNS was targeted due to its strong ties with networks and MVNOs, and Expansys plans to extend this to allow it to offer SIM-only and connected handset propositions through its online portals, starting in the UK.
This will allow it to target new customers, as well as making Expansys attractive to manufacturers and offering them a platform on which to exclusively launch OEM products on a global scale, removing the need for distributors, according to Expansys’s directors.
Directors also predict consumers will spend more online on technology, and will be more inclined to buy SIMs and handsets separately to get the best value in the future.
Other strategic initiatives include: increasing the geographical spread of its customers base, with websites in new territories to be launched soon; higher margins through increased sales of related products and services, such as accessories and insurance; and building strong partnership relationships with large OEMs.
More acquisitions in the areas of tablets, laptops and other wireless technologies are on the cards as eXpansys grows its product offering further.
Expansys chief executive officer Anthony Catterson said: “This is a transformational moment for eXpansys. I am delighted that we have been able to attract such high-calibre individuals onto the boar, and have also received the support of blue chip institutions who have joined the share register.
“This deal opens up a number of significant strategic opportunities for the company that we fully intend to exploit.”
Wigley said: “eXpansys represents a high-growth opportunity built on a world class technology platform. eXpansys has the potential to be an international market leader.”
Jones added: “We expect to create over time a real powerhouse, both in terms of its investment potential and its ability to serve consumer technology products to consumers right around the world.”