The Management Board of Summa Linguae Technologies S.A. based in Krakow (“Company”) hereby announces that on 12 November 2019, a subsidiary of the Company was established, i.e. 1229913 B.C. LTD. (“HoldCo”) based in Vancouver (Canada). The Company holds 100% of shares in HoldCo, representing 100% of votes at the shareholders’ meeting.
On 16 November 2019, HoldCo concluded an agreement on the purchase of shares in GlobalMe Localizations Inc. based in Vancouver, Canada (“GlobalMe”) with partners of GlobalMe (“Agreement”). The Agreement was concluded under the conditions set out in the Agreement, in particular on the condition that the Company obtains relevant consents for the purchase of GlobalMe’s shares.
Pursuant to the Agreement, HoldCo will purchase a total of 1,060,000 (one million sixty thousand) GlobalMe’s shares from GlobalMe’s shareholders, constituting 100% of the share capital of GlobalMe (“Shares”).
The ownership of the Shares will be acquired by HoldCo upon payment of USD 7,000,000 (PLN 27,230,000.00 converted at an average exchange rate of USD 1 = PLN 3.89) (“Price”).
The Price for the Shares may increase by no more than USD 2,500,000 (PLN 9,725,000.00 converted at an average exchange rate of USD 1 = PLN 3.89), provided that GlobalMe generates sales revenues in the financial year ending on 31 December 2020 or 31 December 2021 at the level specified in the Agreement (earn out). The maximum price for the purchase of Shares may not exceed USD 9,500,000 (PLN 36,955,000.00 converted at an average exchange rate of USD 1 = PLN 3.89).
The Shares will be purchased with funds obtained from the issue of new shares of the Company, as announced by the Company in Current ESPI Reports Nos. 38/2019, 39/2019 and 40/2019 of 28 October 2019.
The Company announced the conclusion of a heads of terms document regarding the acquisition of GlobalMe in its Current ESPI Report No. 18/2019 of 24 May 2019.
GlobalMe is a technology company operating mainly in the US and Canadian markets. GlobalMe has a subsidiary company in the USA. GlobalMe uses its proprietary technology and specializes in developing solutions for data annotation, collecting and processing multilingual data available in many different forms (voice, image, text), used mainly for working out algorithms enabling AI development. GlobalMe provides also content localization and translation services. GlobalMe is a leading provider of such solutions for the largest IT and high-tech companies.
According to the information provided to the Company, GlobalMe estimates that throughout 2019, it will generate revenue of USD 6,500,000.00 (PLN 25,285,000.00 converted at the average exchange rate of USD 1 = PLN 3.89) and adjusted EBITDA of USD 1,700,000 (PLN 6,613,000.00 converted at the average exchange rate of USD 1 = PLN 3.89).
The Agreement is material as the acquisition of GlobalMe is part of the Company’s strategy of building a global brand that provides technological solutions to manage and process multilingual content, ranked among the top global players in the industry.
The Agreement also meets the financial criterion of a material agreement, as the price of the Shares exceeds the materiality criterion set out in the Disclosure Policy published in Current ESPI Report 37/2019 of 24 January 2019 (“Disclosure Policy”). The Shares have been recognized as material assets due to the fact that their value exceeds the materiality criterion set out in the Disclosure Policy.
Legal grounds: Article 17(1) of MAR – confidential information.
The Company’s representatives,
Krzysztof Zdanowski, President of the Management Board