Sinch Expands to Brazil, Acquires TWW

Oct 10, 2019

Sinch AB (publ), a provider of cloud communications for mobile customer engagement, has entered into a definitive agreement to acquire TWW do Brasil S.A. for an enterprise value of BRL 180.750 million. Using today’s SEK/BRL exchange rate of 2.43, this corresponds to SEK 439 million.

Founded in 1996, TWW is the third-largest SMS connectivity provider in Brazil. The company serves more than 3,000 businesses, both large and small, including many of Brazil’s leading enterprises in the banking, retail and education sectors. Messaging volumes are continuously increasing and in 2018, TWW delivered 3.4 billion messages on behalf of its customers. The company employs 37 people in São Paulo, Brazil.

With a population of 210 million, Brazil is the largest country in Latin America by population, GDP, and geographical size. It is the fifth most populous country in the world and is now seeing a rapid uptake in smartphone penetration and mobile internet usage. Customer engagement through mobile messaging continues to gain popularity, and rapid uptake of new technologies presents opportunities for Sinch to offer its broader portfolio of next-generation messaging, voice and video to TWW’s customers.

In 2018, TWW recorded revenues of BRL 134m, gross profit of BRL 35m, and EBITDA of BRL 17.5m. In Swedish krona, using today's 2.43 SEK/BRL exchange rate, this corresponds to revenues of SEK 326m, gross profit of SEK 85m, and EBITDA of SEK 43m. The total price paid by Sinch implies an EV/EBITDA-multiple of 8.9x based on expected adjusted EBITDA for the full year 2019.

The transaction is expected to close in the second half of October 2019 and will be financed using Sinch’s available credit facilities.

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