M&A Announcement

Jun 15, 2020

Welcome to the Cinch AB Investor Update. Throughout the call, all participants will be in listen only mode, so there's no need to mute your own individual lines. And afterwards, there will be a question and answer session. Just to remind you, this call is being recorded. I'll now hand the call to Thomas Heath. Please begin your meeting. Thank you, operator, and good morning, everyone, and welcome to this analyst and investor call with Cinch AB about the acquisition of ACL Mobile. My name is Thomas Heath. I'm Chief Strategy Officer and Head of Investor Relations. With me on this call today is our CEO, Oskar Werner and our CFO, Roszan Saldanha. With those opening remarks, I'll hand the word over to Oskar. Thank you, Thomas. So we're very happy to announce the acquisition of ACL Mobile today. And in this call, we will give you a little bit of background and have questions and answers, of course. So if we can move to Slide 2 in the presentation, please, operator. So this is Cinch. Many of you have seen this slide before. So revenue per 12 months of $5,600,000,000 and adjusted EBITDA of $646,000,000 and roundabout 700, 800 people presently in 33 countries. We do customer engagement through mobile technology, and we do €40,000,000,000 engagement per year. And I ask you to remember that figure. That's a little bit it's interesting in the context of how we're doing here. We do cloud communications squarely for messaging and delivering messages for enterprises that want to communicate to their customers. Voice services, connecting voice calls or video services to a much more extent. But if you want to do a video service to, for example, a doctor service, doctor online service or something like that, we serve 8 110 of the largest U. S. Tech companies. And this is a growing global multibillion dollar market. That's also interesting in this context. The market is truly global. It is in any country that you go, you will see enterprises using these services. And also then if you have a goal to be a global player, you need to be present in the largest economies of the world, and that's one of the reasons to this being interesting. And then we have 100% consumer penetration. So pretty much any consumer with a mobile phone is a user of these type of services. As you know, I mean, we're all called a ride hailing service or we've all been receiving a text message from our banks. And that's also one of the reasons here. We have global customers with demand to delivery into India, and therefore, it's interesting to expand into that market apart from the market being interesting in itself. All right. Operator, let's go on to the next slide, please. So Slide 3 in the presentation. So this is a different context, the gross profit, adjusted EBITDA and the synergies of the transactions we've done. As you can see, we have had a strong growth organically. But also these latest transactions, they are putting us in a completely different level. So both on the gross profit and the adjusted EBITDA side, it is obviously very strong to be able to make these transactions and acquiring companies that are strong, highly profitable in these times. But given the context, you can see the both way the SBI and ACN impact on both the gross profit and adjusted EBITDA. And we believe all of those transactions will put us in a much stronger position to be a leading player globally in the CPaaS market. Yes. So operator, can you please go to the next slide, please? The markets in generally, if we slightly look at Slide 4, messaging being our core segments, we don't show voice and video on this segment, but messaging alone is a $70,000,000,000 market. And it has and estimates are varying actually between $15,000,000,000 $50,000,000,000 market. We choose to take the lower end of that figure and believe in that, but it's what most corresponds to our own figure of the market. But as you can see, if you just count the size there and count our revenue and the other main top competitors in this market, it's a very fragmented market. And obviously, it is a fragmented market because it's present in all countries. And that's also why if you need if you want to be in global favor in the long run, you will need to be present in the largest economies, which this deal represents. And then you have on the CPaaS side on the Messaging side, you have the main business on SMS, which is growing at solid rates, but you also have a very high growth part of the market, which is more on the WhatsApp, RCS, WeChat, KakaoTalk, where you have the new messaging channels, which is growing very, very fast. On the CPaaS side, you have a fast growing SaaS part of the business where it's you add SaaS value add on top of the messaging or voice or video transactions and that part according to all researchers growing at a fast pace. Interesting about this transaction is India is WhatsApp, and then I mean WhatsApp for Business, one of the top three markets, probably one of the top 2, if not the largest market for WhatsApp and business as it is or business services. And so that's also an interesting market from an innovation perspective. And this comes both to the left and the right hand part of this market because WhatsApp as a channel is large, but that also means that the opportunities to create value added services on top is large. So here you can truly see that Brazil and India is leading and being highly present in those two markets will drive your innovation. You can see the emerging markets are actually driving the innovation into the more developed world in this regard. So operator, can we go to Slide 5, please? So this is the playbook for profitable growth that we laid out based on 2 pillars, partly being strong in the connectivity business and then in the software services business. So the connectivity business being delivering messages or terminating voice calls or terminating video calls. Sorry, software as a service business being the software value on top. This transaction is representing us being stronger in the ConTivity business, and it isn't truly, truly making us grow. It's about all making us grow in an profitable manner, which is something that we are very, very proud of or to be able to do. But it gives us a foundation, given that India is highly innovative markets, to go fast in the Software as a Service business. All right. Operator, let's go to Slide 6, please. So we have set a goal to do M and A in 2 categories to meet our strategic objectives. 1 is the transactions in the scale and profitability area and the other one is in the techno lingo market area. So scale and profitability being typically larger, high capital companies such as ACL. And ACL takes its fairly interest in profitability. It's run by 3 other people. It's highly profitable. It's present in the large market. It's been run for a long time. And the Technolingo market area is where typically buys small make small transactions for a component of technology and a go to market, which we think it's better to acquire than to buy. And then we acquire that, and we typically then gain those capital transactions globally. Examples here could be like Myelison or Chatlayer on those type of transactions. Larger companies are, of course, always a little bit in both, and that true for ACM as well. A technologist that Lion's shares end up in the scale and profitability category. So operator, can you go to Slide 7, please? And here you see a range of the latest acquisitions we made and how we see them fitting in the big context. As always, they're a little bit the larger transactions are always a little bit on both ends, but ACM has a high net addition in the scale and profitability category. Operator, you can go to Slide 8, please. So ACL, it's a leading cloud communications provider in India and Southeast Asia, one of the top three players in India. And it has a very strong customer base with a leading position in banking and finance, so very solid, strong customer base. We expand our customer base and diversify our revenues and our gross profit to a whole range of very, very solid projects. It has a significant scale with $47,000,000,000 business messages handled in the past 12 months. And if you remind if you remember the figure that Cinch bid $40,000,000,000 You can see this transaction be very large. Finch, with the latest acquisitions, is actually doing $60,000,000,000 So in total, it would be SEK 110,000,000,000 messages with all the acquisitions we have made now. But as you can see, the SEK 47,000,000,000 is very large, and that is driven by a couple of factors. Partly, it is just you can see the power of being in one of these very, very large economies. And it's just a lot of population in India, and therefore, the number of messages goes up. And also, the relative the number of messages or transactions in the cloud communication space per capita in India is very high compared to most other countries. And obviously, both of those factors makes it an interesting market for us to be in. And ACL has 288 employees in India, UAE and Malaysia, but obviously, they buy a share being in India. The L'Oreal, we think, is very straightforward here. It's a significant scale in the world's 2nd largest novel market with 1,300,000,000 population, and we believe this is one of the market where most innovation and most type of services in the mobile market is in mobile industry is happening. And we believe that if you should be a global leader in this market and telecommunications space, you need to be in the population centers of the world and India obviously being one of them. The other very important is ACL has more than 500 large enterprise customers and including the majority of India's privately owned banks. So very strong customer base that we can add on to our own customer base, but it's diversifying our gross profit and our profits. SIR Broadbanding, it's a highly accretive deal, fits in the skin and profitability category. So the financial side of the deals is very solid. And the 4th one, also very important is that it expands our super network and gives us direct connections in India and a competitive cost structure for further expansion into Asia. And this expansion of the super network is very important to our largest customers. As you know, we are a supplier to many of the world's largest customers, and they have a strong a very strong demand that they'll deliver into India. And so we see it both getting a strong base in India of Indian Enterprises but also being able to offer a strong service to the WatchGuard customers who obviously also see India as a larger as a launch and very, very important market. So for us, this is a fits very well with our strategic agenda. And we did set out early in the year to say, all right, if want to be a global player, what are the regions we want to be in? And Latin America being one of them that we wanted to enter and then India being the 2nd. And so we can now see we're a leader in U. S, Europe, Latin America and India. And I think that makes us a truly global player, if not the most global player in this industry on a global basis. On the integration side here, I mean needless to say, we have been very active on the M and A front, and we need to see integration. We need need to take great care and be very thoughtful while we do this. And then we have thought at great lengths about do we think that we have the capacity to make this type of transactions? And do we think we have the transaction capacity to integrate it? And we believe the answer to that is yet. We are, in this case, maintaining the leadership with the ASL Founder and CEO, Sanjay Goyal, joining Cinch. And we're going to run and operate this for the future as its units. And the good things with when you acquire these type of larger companies is it's a company that's been around for many years. It is stable. It stable long standing customers. It has a management team, and we will keep a lot of these structures intact in this deal in order to have a strong base in India. And as I said before, we're going to use ACL's direct operating connections in India, U. A, Malaysia for all our customers. And on the synergy assessment, we will get back with a more detailed estimate after the ACL and STI transaction had closed. And the reason for that is straightforward. It is that STI and ACM, both of them are operation centers out of India. So we need to look through the combination of these 2 and then to then get back at a later stage with the full synergies. And I think that's prudent to do in this stage, not to overestimate the synergies we have or not to underestimate them. On the financial point side, we do pay at total enterprise value of or maybe Russian, if you want to take this part of the presentation. And then I'll take the next two slides here. But if you want to comment this and give a little bit more detail on the financial side. Yes. I'm happy to step in, Oscar. Thank you. Again, good morning, everybody. Very excited to announce the acquisition of ACL Mobile this morning in India. Just on the financials very quickly. Singe is paying is agreeing to pay a total enterprise value of INR 5,350,000,000,000 which equates to INR 655,000,000 in Swedish kronor. It should say INR18 there. And Acl has revenues of just under INR5 1,000,000,000 during the 12 months ended March 2020. Fiscal year in India ends on March 2000 in March every year. They have a gross profit of INR 1,901,000,000 and an adjusted EBITDA of INR 4.80 million. These numbers correspond at current exchange rates to revenues of INR607 million, gross profit of INR134 million and EBITDA of INR59 million. Their like for like gross profit growth is 13% in the 12 months ending March 2020. We expect this transaction to close, the first closing coming in Q3 of 2020, where we are acquiring 82% of the company, And then we have a second closing coming more towards the end of the year, after December 1, 2020, where we acquired the remaining 18%. The enterprise value and the purchase consideration will the purchase consideration will be paid in proportionate parts to the acquisition of shares. So with that, I'll leave back to you, Oskar. Okay. Thank you, Porsche. So go to the next slide. Slide 9, please, operator. So India being the 2nd largest mobile market in the world with a population exceeding 1,300,000,000, 1,200,000,000 mobile subscribers and run by the 50% smartphone penetration. So here, we still have a lot of future phones and projecting a high growth going forward on smartphone penetration. That's the world's highest data usage per smartphone at 9.8 gigabyte per month. So here, we see a lot of innovation happening in the mobile ecosystem and in this truly mobile first country. And being a cloud communications company in mobile, there is nothing as important or there's a lot of things that are important, but it's one of the key things is following the innovation trends in the market. So India being a very good example there. It's a rapidly digitizing economy, 2nd only to Indonesia in the world, if you look at a McKinsey report that you can see down in the notes. And it's the world's largest WhatsApp market with over 400,000,000 users in July 2019. So you can see it's both a very large and what we think is very important with our market, India, it's a very large here and now market where we can make solid profit as of today, but it's also a very, very important market going future for all the innovation that is going on in the market and being present in both of these aspects is very important to us. And then going on to Slide 10, please, operator. So ACL Mobile is founded in 2000. It's a communication platform for real communications of ResNet, WhatsApp, IP messaging and voice, more than 500 enterprise customers. As we said before, including a majority of India's privately owned banks, dollars 47,000,000,000 messages sent on behalf of businesses, 288 employees. And as you can see in the customer segments, very large and well penetrated in banking and also in insurance. And as you can understand here, a couple of things are very, very solid and financially sound cut base. But also, there's obviously a lot of other segments as well and a lot of growth opportunities, meaning in different segments in India, as you can see from this slide. If you can deliver 47,000,000,000 vessels in this area, there's obviously a lot of vessels in other areas as well. Very important to say, I mean, there's also a platform here called Axion. That is a platform for enabling banks and enterprises to handle their own communication needs. And it's a platform that they can use to that is offered to banks, both to route traffic to ACL but also to route traffic to other suppliers. So they're basically both doing what we're doing but then also enabling enterprises to handle their messaging needs and handle a set of different suppliers, which I think is good. And it's used by over 30 banks and financial institutions, needs all the need from financial institutions in India and all the requirements, especially with electronic banking transactions. And roughly 40% of ACL's total methanolines comes from banks that are using Axiom as a routing engine and then sending partly part of the traffic to AGM. It has a lot of flexible deployment options, both on premise and cloud, and it's secure, flexible and reliable. So operator, if you can go to Slide 11, please. So expanding the TiVo network being very important for our largest customers globally. So this adds direct connections to all mobile operators in India, UAE, Malaysia, as you see below. This is important for securing end to end control and end to end quality. As you can imagine, we can go to a large customers in the West Coast of the U. S. And say we can control the entire chain from Silicon Valley all the way down to the operator in India. And very few, if any other player, can do that. And this is important from a quality perspective to not have to depend on middlemen. And we can ensure the quality end to end all the way from the globe to the carrier. And that's a very, very important feature if you want to find a high quality service. And high quality can be both in both enhanced enhanced security. It can be speed and throughput. It can be improved redundancy or a broader feature support or it can be all of the above basically. But that's typically we have seen a very powerful way to grow with our large customers of being able to provide those type services. All right. Operator, if you go to the next slide, please. And Roshan, if you can cover the slide. Yes. Thank you, Oskar, and yes, for taking us through why this is such a great deal for Cinch. Just commenting on the financial leverage then. As you know, we Cinch has a financial target to maintain net debt over adjusted EBITDA at less than 2.5x over time, and I would stress the over time here. And as well, when we look at sort of the pro form a calculation, including the last 12 months of adjusted EBITDA for the acquired entities that we have announced and that we have closed, as at Q1 2020 reported, we had a positive cash position of 1. When including the TWW and My Elephant portions, then we will come to 0.9%, when including also, in addition, Chatlayer, which we closed in April, just after Q1 was closed, we would come down to a positive cash position of 0.8 percent. If we then on a pro form a basis also add in SDI and Wavy, which we expect to close during the second half of twenty twenty, we would have a leverage position of 2.7 percent. And then finally, including the adjusted EBITDA and the full consideration for the purchase of ACL, we would then end up at a leverage of 3.2. This pro form a leverage of 3.2 Operator, please turn to the next page. Page 13, this is just an overview of the integration process. And just as an overall comment, of course, we have a deal scouting process. And when we have come sufficiently forward in the deal scouting process, we are performing a very comprehensive due diligence covering commercial, operational, financial, tax, HR, legal and integrity areas. Post that and commercial negotiations, of course, we have signing and announcement on a day such as this. Then until closing, usually due to regulatory restrictions, we are only allowed to plan integration. And then, of course, after closing of the transactions, the actual integration work begins. When it comes to the integration work that we are doing, if you look to the already closed transactions such as TWW and Myelephant, which were announced during October 2019 and Chatlayer, which was closed in April 2020, we are progressing as per plan. In the case of PWW, we have a platform integration ongoing. And in Myelephant, we are targeting a U. S. Launch this year. And in chat layer in the case of chat layer, we are performing deeper integration. When it comes to the transactions that we have announced, but not yet closed, WAVI, SAP Digital Interconnect or SEI and from today then ACL. We have regulatory processes ongoing in the case of WAVI and STI as well as integration planning together with the management for those companies as applicable under regulatory rules and conditions. In the case of ACL, we will be performing further synergy assessments as well because we see benefits of having ACL and also that STI has a significant presence has some presence in India then. Turning to the next page, Page 14. Just to remind you of sort of the message volumes. And Oster mentioned earlier that combining all of the transaction volumes that we have, including the signed but not yet closed transactions on a last 12 month basis, we would have more than 110,000,000,000 dollars transactions. The acquisitions of CWW and My Elephant, of course, last year in October added significant volumes. Where you see an increase there in the end of 2019. In the beginning of 2020 or specifically in March 2020, we had a onetime spike as we commented on in our Q1 report commentary. And we have seen already in April, as we said at that time, that, that spike had started to had gone away and that traffic volumes had started to normalize. I think you just want to reiterate that message that the spike was a one time spike in the end of March 2020. We have growth from existing not it was a one time event. In addition, I think just to not was a one time event. In addition, I think just to reiterate what we said in the Q1 report, our voice and video segment, where we have a significant amount of traffic coming from ride hailing business, has been affected by lockdown restrictions, and we have seen volumes drop in Q1. That was a couple of weeks. But during the Q2, of course, it is affecting the entire quarter, at least until now. And then finally, when it comes to messaging volumes, as said again in the Q1 report, we have seen some segments being negatively affected, whereas other segments then increasing and compensating for that negative impact. So again, messaging volumes continue to trend more in line with normal behavior, excluding the spike in Q1. Finally, turning to the next page, please, operator, Page 15, our financial targets. Adjusted EBITDA, adjusted EBITDA, which are adjusted EBITDA per share to grow at 20% per year and net debt to remain at less than 2.5x adjusted EBITDA over time. We grew adjusted EBITDA per share at 52% measured on a rolling 12 month basis and net debt we had a positive cash position of 1% at the end of Q1. And as I said, pro form a net debt would be at 3.2x with the acquisitions of Wavy, SDI and LECL. With that, I would like to hand back over to you, Oscar, for any concluding Thank you, Roshan. So the concluding remarks here for me is India being 1 of the largest markets in the world, the most innovative mobile markets is very key to being both from a local perspective but also from being able to serve successfully serve the largest brands on the planet. And that is very clear on the strategic intent and on what we're doing here and the need. And we think it's very, very strong that we can now say that we're our leaders in U. S, Europe, Latin America and India. That makes us truly global, which is very important in this market. So that's number 1. And so I think the strategic rationale for making this transaction is, to us, very strong and very straightforward. And then the other part, which I'm sure you all think about, all right, so is it right to do it now? And then can we handle the integration? And then the answer to that is, 1, you cannot always choose the timing of M and A transaction, as you know. So you have to sometimes have to choose when do you do it and then or do you not do it at all. And we think this is one of the best markets to be in and the most high quality supplier or player in this market. And therefore, we think the transaction is good. But obviously, then on the intuition front, we are we analyze that through in a very good manner, and we do think we have the capacity to do it. But as you also note that it's a stable long term company that has operated on itself for a long time. And therefore, we can it's not like we needed to do anything immediately. We this is a stable company that will continue but has been running for a long time and will continue. And also, a very important point here is where these companies we know for a long time. It is not something it's not like we're super new to this market or to the Indian market. We have used almost all those fires in India for a long time, and we have evaluated over many years sending traffic via them. So we know the people and we know the good players, and we know what's happening in there since we obviously have traffic as of today. So therefore, many of these companies that we acquired is known entities to us. And it's people that we know and it's companies that we know that obviously takes down the risk of these type of transactions a lot. And so that's very important to understand that it's almost like 20 years of experience in a market that we're playing out in a short period of time here to say, all right, we know all these players. We're taking all our experience and then extending it out to making a set of acquisitions into in a rapid pace in order to get where we want to. And it has a long, long background. But with that said, I want to leave over to Thomas and then for Q and A. Thank you, Oscar. And operator, are there any questions on the line? Thank you. Our first question comes from the line of Daniel Dube of Handelsbanken. Please go ahead. Your line is open. Thank you so much for taking my question and congratulations on another interesting acquisition. You for sure keep us analysts quite busy, but it's positive. My question would be first on the if you can comment a little bit on the growth trends in gross profit. It's said to be a 13% this trending upward or flattish? Or is it in line with the market? And is it big differences between ACL and mobile versus the Axione platform? Roshan can take that. Yes, I can take the growth trend. Thanks, Daniel. When it comes to the growth outlook, I think it's I think the short term growth outlook in the case of ATL, there is a corona pandemic ongoing in the world, I think, and India, of course, has had quite significant lockdown restrictions here beginning in March and I think the whole month of April and the whole month of May and only partly lifted at least now in June. So I think that's important to remember how that develops during the coming weeks months will affect the short term growth outlook. When it comes to the long term growth outlook for the to that. And we aim, of course, to improve that, I think, for ACL as well compared to historical performance. I think there are several reasons to do that. I mean, one is, of course, the combination of Cinch and ACL combining our strong global product and global presence of customers as well as the local strength of ACL in India, as well as sort of our how we can leverage on that position in our emerging market strategy. I think just to point to 2 of the reasons I think Oscar went into more detail in his presentation and comments, but we are quite positive that, that long term growth outlook is higher than the number historically. Okay. And another question, if I may, would be also on Axione. Do you is it already cloud enabled? Or do you see a need to work on R and D to cloudify this to get good enough cost and revenue leverage. And also, if you consider it a positive thing or a risk that it is generating some quarter percent of the total SEL messaging volumes understood? So this is Oskar. I can take that. No, we see that's an opportunity, definitely not as a risk. And we see this as a very strong point to both be able to supply what we do with but also enabling enterprises and especially banks to handle the necessary needs. I think it's a strong point that now it's an opportunity in order to risk because you're basically doing an additional service to them. If it's cloud enabled, it's a high scale, and you need to this is one of the very interesting dynamics with this type of transaction is this company is handling 47,000,000,000 messages at a fraction of the cost that we are handling our 40,000,000,000 messages online. Is it scalable? Is it cloud enabled? And then all of those questions are yes. But it's also giving us a low cost base. We cannot in Cinch, we're not as cost efficient in handling the messages as well or far from. And we think this, I mean, giving Cinch this very strong ability to have the high the very high volume, the monoliths that is too low cost, it's going to be very important going forward. As in any highly competitive market, that is important. So the answer is yes to your questions, but we also see that as a very strong strategic advantage going forward. Perfect. And my final first question would be if there are any news on the regulatory approval of SDI and Wave as of yet? I can take that, if you like. Yes. Yes. Donnie, I mean, we are, of course, I mean, both WAVI and SDI involve a number of closing conditions, among other things, a carve out as well as regulatory approval in a number of different markets. At this point in time, the only thing we can say is that we are progressing in those processes, and we have close dialogue with the different regulators involved. I mean, there's no other update to give other than that we are still confident that we will close this in the second half of twenty twenty as we have previously announced. Thank you. Our next question comes from the line of Kjelluk Svynovich of Carnegie. Please go ahead. Your line is open. Thank you, operator. Good morning, guys. A couple of follow ups. And I think one obvious is, of course, on the integration backlog here. And I think your comment was very good there, Oscar. But if you can maybe talk briefly on how these processes differ from another. I mean, I can assume that there's quite a big difference between integrating SDI and ACL. And to me, ACL seems more similar maybe to TWW in terms of integration process. You are correct. Well spotted. ACL and CWW are similar in one sense and that it's kind of straightforward messaging companies. SLP has a set of other units as well. So they're more similar. And then the big difference, obviously, ACM being bigger, but also the low cost nature and very high volume nature of ACM is different. It's that's the blue is there as well, but ACM takes it to a different level. But that's true. But if you look at these, if you look at the ones we've done, I mean, My Elephant and Chantley are squarely in one category there. We're making them own one piece of a global component. So we have MyElephant and Chatlayer, their tech teams, They're asked, oh, you own this component globally. I mean, cloud, that's possible to do, right? We just connect it we just uploaded it out onto Amazon, and we connect the different units. But R and D wise, the only one unit. And we're doing that integration and making sure the lines and the interfaces that we have at R and D teams are clear and then they can own the other component, so they can increase the space there. And we see that going forward on a very positive note. And we're right now putting together my elephant and the vehicle team into so we're really seeing that going forward. And the transactions we do on the WW side, it's ongoing, and we're deploying our methanolene platform down in Brazil and Latin America, and we see that ongoing in a positive manner with a very positive collaboration with the WW. So we see those 3 are kind of underway, and we also see both from the Mayenstern, TWW and Chartres side. We have great demands from our existing teams and a lot of cross sell. So actually, a lot of our deals in Europe are now containing MyElephant technology. So a large portion of the taxi side customers are containing these components already in days. We see also on the revenue front. On the WAVI, SAP and UKL, I mean, obviously, we can do integration planning and our contract to integration execution after the day closes. But we see the planning ongoing with both SAP on an older stage and WayV as well. I mean, we're laying out the plans, and we see how this is going to fit in. And it's very seeing these teams come in and then can see you can do the integration and then how much you can actually lease onto forward looking R and D and forward looking services and forward looking sales. I mean, it's a it becomes very, very powerful when in the middle and seeing the opportunity here, it's you can see the power of actually doing this and coming up on the other operation. So I'm generally very positive. That actually is to say it's the positive thing, obviously, it's a lot of work, but the positive things of doing a number of transaction like this is you can really start to plan for it. We know we're going to have a lot of integration work in the coming couple of years here, and that makes it possible for us to plan for and have a professional team really focusing on it. If you do it once is in 2 sys, it's almost harder because you cannot plan for it, you cannot resource it. But here, we there's so much synergies and so much opportunity. We can actually plan for it in the long term, and we can resource it, which in one way is harder, of course, but in one way it's almost easier. Like anything you do repetitively obviously becomes you can create an integration machine in a much better way. All right. Thank you. That's very encouraging. In terms of synergies here, you're not targeting any synergies. And I know ACL seems to run quite effectively based on the margin. So I assume that most synergies here will come from the revenue side in the future. And you did mention now in some forward looking R and D. But is it safe to assume that there should be some revenue synergies here? And maybe also what degree of your customers have traffic needs in India, if you can compare these a bit? So registers definitely, we typically don't state those, as you know. But definitely, I mean, we see them in TWW. We see them in my elephant and we see them in chat later. And I would say of our largest customers, the big tech customers, I would say 100% have needs in India. I mean, there's not a global brand who no customers in India, and then particularly on global. So on that side, yes, there's definitely opportunities. Then it's on routing. Obviously, we're now using the routes in ACL, and they have a lower cost base in India than we do. So our existing traffic, we can port over and get a more cost efficient than we can today. And therefore, you have solutions on that side. And then on the cost side, you're correct. I mean, when you go into here and you have a very low cost base, you need to be a little bit careful about the synergies then on the OpEx side and also because both ACM and I have opportunities there. So you're correct, a large portion being there. And we're to be conservative, we don't want to state too much on the OpEx side due to these couple of factors before we have got results into the deal. And in the long run, we see ACN as platform for having a lower cost base where which we think is very powerful and also very strategic. So if you take a play up in the long run, we do think that it's very powerful and make it more competitive in general, which you can always see as synergies and something else. But we see that, and we think that will have an arch impact on us going forward. All right. Super. And just one final follow-up there. You did mention the U. S. Big tech. And I think you mentioned before that having access to Latin America and India is very important to your current customers. You see very strong demand for delivery in India. And at the same time, your customers like the U. S. Big tech guys, they've been driving organic growth in the past quarters. You also mentioned that there is significant runway left for these customers with regards to traffic. So I'm trying just to understand the hurdles here that they see. Could this enable the likes Salesforce, etcetera, to really allocate more traffic to Cinch now? Yes. I mean that's I mean I can't say what they're going to do, but that's our goal, of course, yes. I mean, a lot of these companies have significant traffic into India. Mean, it's not a surprise that this is a big market, right? So all of these customers are global. They have significant traffic into India. They typically don't send it via FINCH today and some do, but a lot of them don't because they may have local relations with companies such as ATL or others because it's just such a big market, right? This is a large portion of the world population, and they can do that. They wouldn't do that for Colombia or they don't even do that for Brazil, but for India or China or they may do that because it's so large companies or so large countries. Super. Thank you very much guys. Thank you. Thank you. And we have one further question in the queue so far. That's from the line of Ramiel Khoura of SEB. Please go ahead. Your line is open. Thank you, operator. Good morning, everyone. Just a few questions from my side. Also just to come back to your question on the cost efficiency here. I mean, euros 47,000,000,000 transactions, but to be the devil's advocate here, it's roundaboutlowteens of your revenues on similar transaction volumes. Is there any monetization issues here? Or is it simply so that you have more higher value termination versus ACL? Sorry, I didn't really ask that question. So they have $47,000,000 transactions. You have $60,000,000 you said, something like that. But let's take LTM numbers. You have 40 percent and NCL posted 11% 12% of your revenues on higher transaction volumes. So whilst more cost efficient, sure, but revenue per transaction seems way lower. Is there any sort of reason behind that? Or am I simply missing anything here? It's a very good question. It is India is a very high volume, low revenue and gross profit transaction market. That is the market structure in India. That is also so that's just how it is. And that is driven by there's a lot of regulations that drives a lot of the ignore of financial institutions to have to use text messaging for a lot of different use cases. So there's just a very, very high amount of transactions. And there is a lower cost per transaction, which both comes from the operator prices to enterprises or to people like us is low, and therefore, it drives lower transactions. But it's also so that, obviously, the huge populations and the company there makes the margin per message lower. So that's true. On the other hand, you can see that you can run off companies in a profitable way. And if you look at the total metrics of them, I mean, their profitability is very similar to any other company that you would see in the text message base, us or WAVI or SBI or anything else. It's just like high number transactions to a lower to a lower gross profit per transaction. That's true. And that's also why we think it's for us to enter this type of a low cost market directly ourselves is very hard because as Western company, you may have the wrong cost base. On the other hand, to have that cost base and then to play them back into our core markets, it's obviously a very large opportunity and also a new way to secure that you don't get low cost competition that you cannot meet. And so that's how I would see that. But you're correct. And if you look at gross profit per message, it's very low. On the other hand, the profitability in terms of gross profit or EBITDA on total is very similar to any other market. But we see that as an opportunity because it enabled us to run that type of business model and not be other way around. So very clear. And then just pretty high level on the deal here. What does it really mean that it's run as a unit? And how does that differ from how you go about in other markets? And then perhaps as a follow-up to that, you've mentioned several times during the day here that this is a platform business. Should we read it that this is a think that HCL has? Yes. I think your two questions are connected in a way. So and it's good questions. It is, yes, due to the very low cost structure here, we obviously don't want to we want to utilize that. And therefore, we want to kind of run it as a unit and run it it's not separate or stand alone. But in many other transactions, we're just we are just taking, right? We're taking our core process that we refined in a bit different areas, and we're implementing them and then unifying it all to 1 platform, 1 organization, 1 operations, etcetera. Here, we need to look much, much closer since it's actually lower cost production that we have. We'd receive an opportunity. And here, we need to then look much, much closer. And therefore, we want to make sure we keep that low cost base and therefore, run this unit and take the integration in a longer term. The your other part of the question, it is correct. We do see this as an opportunity to do an organic entry into market, which we typically before didn't have access to because it's a lower cost base. And we see that as a very strong thing with this transaction going forward. It's very clear. I have 2 more questions, so that's fine. First off, on the due diligence here, I mean, you mentioned that you've been in contact with the company through aggregation, etcetera, previously, and you've had a chance to interact with the competitors as well. But from conversation starting to deal closing, how has the due diligence actually been made given sort of current situation we're in now? Have you been able to meet the company? And how thorough can you be remotely? Yes. We have met this company several times. This process started long before COVID. And there's 2 parts to the process. 1 is the satellite we've been in India for a long time. We've been going to come there for years, and that's obviously before COVID. So that's one part. But if you just take the proper digital and process, it started before COVID. So several people from Singhs has been down in and met this company several times. So yes, we met them. Obviously, the latter part here, we have had to do remotely for many reasons. But yes, we met with that sometimes. And we should also mention that both Russia and Vikram are born in India. So it's also closer as we've been able to have both our CFO and CPL having been born in India and obviously have made it easier for us to assess the Indian market as such with 2 management team members already being born in that country. It's very clear. And a final one from my side here. Just looking at the purchase price, 11x EBITDA trailing, 15x percentages for the SLE unit. Looking at the trends since your IPO a few years ago, seems to be sloping upwards somewhat. So I mean, is that sustainably on these levels, bearing in mind it's a regional player, etcetera, but stripping that out, I mean, have multiples, generally speaking, come up? Or is this a one off platform transaction? It's obviously hard to say, but I think this market has been, in general, up well value a lot. And then you can see that in our own share price, I think the comparative numbers are obviously I don't think the comparative numbers are trending up, not the actual numbers we only look at, but it's obviously going up. And so generally, the market has been up valued, and I think that maybe for all assets. On the other hand, it is not to say it is not even when you look at a multiple individually, it is very hard to say because it's there's so many things that goes into that that go so many things that goes into that number specifically. But I think when I look at it that all of these transactions are very highly accretive to us in any way, shape or form. And that's why we think they're very sound to make. And then we obviously evaluate each individual transactions on a stand alone basis. It's very clear. Thank you so much, Jose. Thank you. Thank you. And as there are no further questions in the queue at this time, I'll hand back to our speakers for the closing comments. Thank you, everyone, for joining the call today. We appreciate your interest and encouragement. Looking forward to speaking to you again the next occasion. Thank you, everyone.