2nd May 2011. Mobile solutions company Mnet Group (ASX:MNZ) has advised that it has negotiated the sale of its wholly owned subsidiary Ring Back Tones Australia Pty Ltd, newly incorporated for the purposes of the assignment of the Ring Back Tones business from m.Net Corporation Pty Ltd to RealNetworks Inc.
The sale consideration is a minimum of $1.667 million cash with additional cash consideration of up to $2 million payable by 31 December 2012 dependent on the achievement of milestones related to specific contract renewal targets. The Ring Back Tones business currently accounts for approximately 14% of the company’s annual revenues, reported as A$5.8m for the half to 31st Dec 2010 (and up from A$2.8 for the half to 31st Dec 2009).
Mnet will continue to support Real Networks in the provision of the services to Real’s clients and extends an eight year relationship between the companies. Under the terms of the sale Mnet Group Limited will sell all of the issued share capital of its subsidiary Ring Back Tones Australia Pty Ltd to RealNetworks Inc.
The sale is in line with the company’s strategy of focusing on the high growth segment of the company’s business. With no debt leading into the transaction the deal further strengthens the company’s balance sheet. Subject to the treatment of goodwill, the transaction is expected to have positive impact on Group earnings to 30 June 2011.
The Mnet CEO Horden Wiltshire said “The industry continues to grow apace and the deal is consistent with our approach of focussing on our core mobile solutions business. We continue to see more and more major corporates and brands beginning to invest in mobile. As devices become increasingly sophisticated and mobile internet usage ubiquitous we are encouraged by our pipeline of new customers as well as the trend of current customers to make greater investments in mobile.”
Mnet is Australia’s leading full service mobile solutions company. From Mobile Web through to iPhone, iPad and Android applications, Mnet provides the technology and expertise to enable our clients to sell and market their products and services via mobile devices. Our commitment to superior customer service coupled with our strong foundation of proprietary technology makes Mnet the mobile partner of choice for many of the world’s leading telecommunications carriers, media companies and enterprises.