Hello, ladies and gentlemen, and welcome to the Sinch AB investor update. I'll shortly be handing you over to the speakers who will take you through today's presentation. There will be an opportunity for Q&A later in this call. For now, I'll pass you over to Thomas Heath, Chief Strategy Officer and Head of Investor Relations. Sir, please begin.
Thank you very much, operator. Warmly welcome everyone to this investor update with Sinch, announcing the acquisition of Wavy. My name is Thomas Heath. I'm Chief Strategy Officer and Head of Investor Relations. Little bit of a technical issue today, so still waiting for our CEO, Oscar, and see if we can sort that out. Luckily, I also have our other co-pilot, Roshan Saldanha, our CFO, with me today. Roshan, I'll hand over to you.
Thank you, Thomas, and welcome everybody to this investor call, where we aim to discuss the acquisition of Wavy and of course, also the other actions that we have taken on the financial market to issue new shares, and increase our credit facilities yesterday. Moving on with this presentation and hoping that Oscar will join us. Move on to the next page number two. Just summarizing Sinch again as a business, we deliver customer engagement through mobile technology. We have a scalable cloud platform around the world, that allows our customers, enterprises, large enterprises, typically, to communicate with their customers using messaging, voice, and video channels. We are delivering 40 billion engagements per year, and with the acquisition of Wavy, that number will increase. Last 12 months, we had SEK 5 billion in revenues and SEK 574 million in adjusted EBITDA.
We're proud to serve eight of the top 10 tech companies in the world, and we've had a scalable and profitable focus in our business model since the foundation of Sinch in 2008. Moving on to the next page. I think this is also something that we really bring up in all of our conversations with the investor community. Just again, to reiterate where the market is today and where it is moving. Historically, the market has been text notifications, primarily through SMS, 160 characters, with limited possibility for conversation. What we can see today is that the market is moving quite rapidly into rich media messaging, and the possibility to add pictures and video to the text messaging channels.
We can see a nascent but fast-moving, growing industry within the conversational messaging space expanding significantly, providing new use cases, and really delivering transformational value for our enterprise customers, which we can enable through our solutions. Moving on to next page, number four. Really where we're seeing this transformation take place on the conversational messaging and the rich messaging side, we see there are three use cases really that or three broad parts of the customer journey, on the revenue generation, service enablement, and customer care. If you look on the objectives of each of these journeys, text notifications has been primarily used in the service enablement part of the customer journey, though it is used in the others as well, but primarily in the service enablement and revenue generation.
With conversational messaging, we can really cover the entire breadth of the customer journey and enable, for example, conversations with customers through OTT channels such as WhatsApp, which are also supported by chatbots or bots and artificial intelligence, such as the acquisition of the Chatlayer platform that we did just last week. Moving on to page four, I think the playbook for profitable growth. Our focus is on having a strong connectivity layer and then developing specific software solutions that build on this connectivity layer, and allow our customers to utilize and get more value out of the connectivity layer. Historically, Sinch has built a really strong connectivity layer.
We have several hundred direct connections with operators and also connections with the major over-the-top service providers globally, and we can deliver communications with superior quality, scale, and reach. In the recent years, we see this nascent software value-added communications platform as a service offering building up. This is where the acquisition of Wavy really helps us in both of these layers. I will come more into that at a later stage. As a company, we're using M&A to meet our strategic objectives, and M&A, we are doing within both of these layers, between both the connectivity space as well as the software as a service space. In the scale and profitability space, we're acquiring sticky customer relationships, we're acquiring direct connections, and also extracting synergies by transferring the Sinch's technology platform. In the technology space, we're acquiring complementary technology that fits our strategic product roadmap.
Again, the acquisition of Wavy really helps us within both of these segments. Thomas, I'd like to invite you in here and maybe give some more color on this.
Thank you very much. We are on slide six. Still, luckily, really the two buckets here, as we try to make it clear, the first bottom level on scale and profitability, where we acquire, typically, a well-run SMS connectivity provider with a regional sticky customer base. Someone who does it well but doesn't have the scale or muscle to be one of the global winners in this market. In the purple box, technology and go-to-market, we acquire complementary technology and go-to-market ability, which we can then leverage across our customer base throughout the world and throughout our different business units. You will know that in autumn 2019, we completed one transaction in each category, TWW in the scale and profitability category, followed by myElefant in the technology and go-to-market category. We go on to slide seven. You can see the history here.
We had to condense the slide this time to fit everything in a little bit. In the acquisition of Wavy, you can really see it's a little bit of both. Indeed, we have valued both of these parts separately as we also communicated in the press release. In the scale and profitability bucket, we have Wavy's established SMS connectivity offering with 13 billion messages sent across Latin America. Separately assessed, you have the technology and go-to-market acquisition of Wavy's innovative product offering and live customers on new conversational messaging channels. Handing back, I think, to Roshan for a bit of the deal rationale.
Thank you, Thomas. Turning to page eight, which is summarizing the deal rationale. We are acquiring Wavy yesterday. We have announced the intention to acquire Wavy yesterday, which is a leading SMS messaging provider in Latin America. It is the second-largest SMS messaging provider in Brazil, but has significant operations in Mexico, and also operations in Colombia, Peru, Chile, Argentina, and Paraguay. This gives us really a great presence over the entire Latin American space with 260 employees. In addition, talking about Brazil, as we've said also before, it's one of the key markets for WhatsApp. What we can see is that Wavy has come forward in that development and has high WhatsApp volumes. It also has customers using Apple Business Chat, RCS, and Facebook Messenger.
The conversational messaging business that Wavy has using these OTT type of services is growing from a relatively small base at more than 200% year-on-year. This is driven by innovation and the use of new channels. For us, the SMS business fits very well into the scale and profitability category of earnings-accretive deals. As Thomas said previously, we're doing the valuation of the SMS business at around 9.5x adjusted EBITDA. Of course, that's a very EBITDA-accretive transaction for us to do. When it comes to the innovation business, that fits into the technology and go-to-market category, and we will use the knowledge and the learnings of Wavy within the Latin American context and to fuel also organic growth in other countries globally and bring that to the rest of our markets. We get 50 direct operator connections in Latin America.
In Brazil, where we already have direct operator connections through the acquisition of TWW in 2019, we further increase the volumes, thereby get cost benefits also within the Brazil market. Then, of course, when it comes to the next-generation messaging, the conversational messaging, the way the revenue model works, we're able to charge more software or SaaS-related charging models with extremely high gross margins. That is also reflected in our valuation of the business where we value it at around three and a half times gross profit and sales. Yeah. I think Oscar is on the call now, welcome, Oscar. Do you want to take over from here?
Thank you, Roshan.
Maybe a little bit more on the deal rationale? Yes.
Yeah. Thank you, Roshan. Thank you for making the start of the presentation. Guess we had some technology problems here in the morning. Yeah, you ran through the deal rationale slide. I can give maybe a couple more commentary on just the deal rationale. This is a deal we've been working on for the last 12 months. We've been getting to know the company and its management team. We've been watching their performance quarter by quarter on EBITDA and gross profit. It's a company we feel that we know well, that we have a good understanding of what they're doing and how they're doing, both from a business perspective and then a people perspective. The deal rationale is like it says on the slide. I think it's very clear. It's an accretive acquisition.
We're adding 14% to our EBITDA, and we're taking in money to fund it for around about 7%. It's a clear accretive deal to our shareholders. It is very clear to me also that the SMS part of the business, having direct connections in Latin America, being 630, around about, million people, being highly sought after and demanded from our biggest tech customers and a lot of our big U.S. and European enterprises, this puts us in a position to offer these international clients a very good service into Latin America. It's strong for us to bring this connectivity to our existing customers. We're now the only player who have direct connections both in Latin America and North America, which we think is a very strong position. Next one being, having an innovation business that is growing with 200% per year roundabout.
I mean, that's from low numbers, so obviously the percentage growth rate is expected to go down. It's still becoming a business that is there and is growing to a size which starts to affect us for real. That's attractive in its own right, just having that type of business. It's also super attractive for us to be able to export the knowledge that Wavy has gained from large enterprise customers in Latin America. Seeing the use cases there, knowing that this use case is successful for the banking sector, this use case is effective for the insurance sector, this use case is effective for something else, and being able to export that with real customer references is very, very powerful. That's something we feel is very strong for us. That's mainly the core reasons for making this deal.
Looking through it, and we've obviously been through it a large number of times here. We feel very comfortable with these things, and we feel comfortable that we both will improve each other's performance. That said, I think we can skip to the next slide. Latin America, it's a region of 626 million people in the region, and it has a rapidly increasing smartphone penetration and mobile internet use. Just the size of the region and having a powerhouse as Brazil being the fifth largest GDP country in the world, we think is a very interesting region for any player that has global ambitions, that wants to be a global player. It's good to put in context that it's almost double the size of the U.S. in terms of people, obviously not in GDP.
Being a leader in such a region with both Mexico and Brazil being very large countries, is important to us. Given the absolute global nature of our business, there is a lot of business to be done in this region. The other interesting thing with Latin America, in particular, especially when it comes to the new technology services that we have done, is Latin America and India is the two leading countries in WhatsApp penetration from consumer to consumer. It's then also the two leading countries in WhatsApp business messaging in our space. That's the two largest regions.
Being able to become a leader in the next-generation messaging in one of the leading regions globally is attractive to us because that's where a lot of the learnings are happening. It's easier to do the learnings in India and Brazil or in India and Latin America because the penetration to consumers are so high. When you have a 90+ penetration of WhatsApp to consumers, it's easier, obviously, to launch business services to that population. Wavy then being part of Movile Group, Movile being a very well-known group in Brazil and often ranked as one of the absolute best employers in all of Brazil. Wavy is a subsidiary to Movile, and Movile owns other companies such as iFood, one of the largest food delivery companies in Latin America.
With Wavy as such, being the messaging part or the messaging subsidiary to Movile, has some 260 employees, nine offices in six countries and brings its connectivity throughout Latin America and adding 13 billion transactions per year. So it's strong connectivity business there and then also on customer volumes using WhatsApp, Apple Business Chat, and RCS across the regions, ranging from large banks to tech companies. On the next slide, if we move to that, we want to show you a couple of use cases that Wavy has done in this new innovation business that will exemplify and I think show you why we're interested in that part of this business. This is one of the use cases that they're doing through WhatsApp. It's a use case to a company called Ingresso Rápido, which is a leading ticket sales and event management company in Brazil.
This company has a large number of incoming calls to the contact centers with 20,000 tickets per month. It's complex to scale support teams with maintaining quality, and they're looking to engage customers with WhatsApp, where they're already active. In an existing purchase journey with a company, they are at some point turning the users from phone to WhatsApp or from web to WhatsApp. It may be in the phone queue, you would say to users, "Hey, do you want to try to answer your question via WhatsApp? If you can remain on the line, you keep your position in the queue. But if you send your question via WhatsApp, we can probably serve you faster," for example. They have created a hybrid chatbot, combining scripted decision trees with AI and natural language processing.
They have support for multiple use cases like PDF ticket delivery and event information and order status. Realizing that actually bots can't handle everything, so maybe they can handle the front end of the question to a specific user, but then handing it over to the live agent when needed. Doing this, Wavy has been able to, apart from doing the message transmission very much like us, they're doing the connectivity of transmitting the messages, but they're also then answering 82% of the tickets automatically by the bot. They have 70% satisfied user in customer service to the consumers, and they're reducing the cost in the call center with 45%.
As you all can very easily understand that that's a very attractive way for companies to be able to reduce costs and especially maybe in these times of taking, all right, you have this number of calls in the call centers, we can able to automate a fair share of them, and it can reduce your cost, let's say 45% or 50%. It's a very strong position. Again, what they're doing here, they're still sending the messages and taking a margin for the sent message, but they're adding a software value add, obviously, for their Software-as-a-Service. That is the bot, the intelligence of actually being able to understand the human intent, what questions are coming in, what question that this user wants to have response to, and then being able to answer that question.
That's an additional software module which they're charging extra for. That can be anything between SEK 0.10 up to SEK 1.00, obviously averaging around SEK 0.30 or something like that for a completed transaction. That's one use case. Look at the next one. This is for a company called PlayKids, part of the Movile Group. We're taking quite a few examples from the Movile Group in this presentation because it's easier to get permission to talk about the stats then. There's a lot of companies in Brazil and Mexico and the rest of Latin America doing these things, everything from banks to financial institutions. This is via Apple Business Chat. It's a new channel that Sinch has not yet launched, but Wavy has launched, and Wavy has been an innovator together with Apple and Apple Business Chat on this one.
Here you can see a couple of different functionalities. You see in a message here, you see a time picker with action buttons in the message. You would actually get the message looking like this, and the blue buttons to the left would be the action buttons, and you can just select them. In this case, it's selecting various times that they want to book a meeting with. Second one being a list picker. You see a list there, and you can just press one of these buttons in the list, and you will select your payment options or what you want to do. The next one being authentication. You can do authentications within Apple Business Chat of who is the user. Then you have the actual chat window, which is within Apple Business Chat.
You can chat with the user on an iPhone and in a message-based format. This is, for example, it's increasing the activation when signing up in the sign-up flow with 45% compared to email and phone, because user preference and the ease of use of this channel is very, very effective. This is a way to get more users to get signed up with PlayKids. PlayKids is a video-based subscription service for kids, I should say. Another very good use case, also adding another channel to the mix is strong for us. Here we have flow from iFood. It's another company partner of the Movile Group, doing food delivery. It's interesting because this is targeting both users and the couriers of iFood. iFood has 120,000 couriers, or people delivering food throughout Latin America.
There are many situations where they require conversations between the customers, couriers, and iFood, and it's challenging to answer effectively and quickly and volume is rising. Here they have a chatbot available through in-app messaging, and again, a new channel for Sinch, with then integration into iFood's Zendesk. Zendesk is the customer care software environment. Again, you automate part of the flow, and when you cannot automate anymore, you send it into Zendesk, and it's answered by a live human. The live human answer is done by Zendesk and iFood's people. The bot here with the AI and natural language processing is done by Wavy. It's helping them to resolve a common use case like, the restaurant is delayed or can't find a location or client can't pay.
You have 7,000 tickets resolved, and then average time to solve a ticket is five minutes and 93% customer satisfaction score. It's pretty easy to understand that all of these use cases are just examples. You can bring them into a lot of other companies, and we see a good way for us to be able to export the great knowledge that Wavy has gained in this area. The combination of Wavy and Chatlayer, you may ask, because they're both in AI and natural language processing. It is Wavy is focused mostly on large enterprise, innovating closely with large enterprises, and Chatlayer has focused is more of a self-serve platform. Wavy doesn't have a self-serve platform, but they have more experience from deep integrations, innovation with large enterprises, while Chatlayer more has a self-serve platform and has less deep integration with large enterprises so far.
The combination is great because Chatlayer will help Wavy to become more scalable, and Wavy will help Chatlayer to have a lot of new use cases for large enterprise sales. Last slide, Roshan, you want to take over to do the financial targets slide?
Yes. Thank you, Oscar. Just to summarize again, the financials related to the Wavy transaction first. Wavy is expected to record revenues of BRL 464 million, a gross profit of BRL 130 million, and an EBITDA of BRL 48 million in the 12 months ending March 2020. I think the closing exchange rate yesterday was just over two from BRL to SEK. Sinch is paying, upon closing, BRL 355 million in cash and just over 1.5 million new shares in Sinch, which will imply a enterprise value of SEK 1.17 billion. I think that gives us a multiple of 12.2x on EBITDA. Closing is subject to customary closing conditions, and also approval from competition authorities in Brazil, and is expected to take place during the second half of 2020.
When it comes to our financial targets, we have unchanged financial targets to grow adjusted EBITDA per share as 20% per year and to keep net debt over adjusted EBITDA under two and a half times. When looking at the Wavy transaction, the company, the board decided that while we could, of course, finance this transaction through our existing debt facilities and cash, and also within our existing leverage limits, we wanted to secure financial flexibility for the future. Therefore, we announced and completed a directed share issue yesterday. The directed share issue was significantly oversubscribed and was finally closed where we have decided to emit 5 million shares at SEK 300 per share, which is a 2% discount, a relatively low 2% discount compared to the closing share price of SEK 360 yesterday.
When looking at pro forma calculations, just Sinch 2019 adjusted EBITDA was SEK 574 million. Wavy at current exchange rates had a 2019 or last 12 months EBITDA of SEK 91 million. Of course, we have Chatlayer, the acquisition that we closed last year that had around -SEK 10 million in adjusted EBITDA last 12 months. When it comes to the net debt side, then we have, of course, Sinch had a closing net debt at the year-end 2019 of SEK 959 million. The Wavy transaction will add net debt of SEK 710 million, the cash component of the purchase price, and the Chatlayer transaction, an additional SEK 75 million. In addition to this, the share issue before emission-related costs will contribute SEK 1.5 billion in cash to the company. That would then give us the pro forma net debt over EBITDA of 0.3x.
In addition to the share issue, we also announced yesterday that we have increased our credit facilities with the bank with SEK 600 million, which is on top of the previously existing credit facilities. Overall, a very strong financial position going forward. With that, I would like to leave the word back to Oscar.
Thank you, Roshan. That was the last slide. The thing I should say is thank you, and then open up for questions.
Thank you. Ladies and gentlemen, if you haven't already and you want to ask a question, simply press star and then two. That's star and then two on your phone keypad now to enter the queue. After I announce you, just ask that question. There'll be a brief pause while any questions are being registered. Our first question is over the line of Predrag Cvijanović of Carnegie. Please go ahead, sir. Your line is open.
Thank you very much. Congratulations to another very interesting acquisition. I think you mentioned in the press release on the synergy side that you will have around SEK 30 million-SEK 40 million that you hope to reach within 24 months. If you can just talk a little bit about how you will go about reaching this, what assumptions are behind, what could occur to make the synergies even larger or smaller than anticipated?
Roshan, do you want to take it or should I?
Yeah, I can take that. Thank you, Predrag, for the question. You're right on the numbers. We said SEK 30 million-SEK 40 million or BRL 15 million-BRL 20 million in expected synergies. That's the run rate that we expect to reach after 24 months. The synergies that we specify are primarily in two categories. One is our cost of sales. As you know, in our business, we have a significant cost of sales towards carriers and operators. What we can see is that both in Brazil, where we have an existing business, we see synergies through increased volumes with existing operators. Then also in Mexico, where we see that Wavy has direct connections, and we've seen synergies with our international traffic terminating into that market. There are synergies in other markets, but these are the two significant ones.
The other part is, of course, on the OpEx side, and that's through a combination of G&A functions both with the Sinch group as well as locally in Brazil between the two acquisitions. We obviously see synergies in terms of how we can run the business together and grow in an efficient way going forward. In addition to these two areas, and these are our best estimates as of today based on the work that we have done, due diligence that we have done.
In addition to these two areas, there are, of course, potential to show additional growth, primarily within the conversational messaging space and how we can export the use cases and the knowledge that we have within Wavy to the rest of Sinch, how we can bring the rest of the Sinch products in when it comes to Chatlayer, when it comes to our knowledge and experience on marketing campaign platforms, and really contribute that into Wavy and drive further growth. I think there's also potential for additional growth in terms of increasing our competitiveness on a global level within the connectivity space. These kinds of growth synergies are not captured within the numbers that we have disclosed.
Yeah. To comment a little bit on what could delay. It is obvious that it is harder to do this in coronavirus time when you cannot travel. It is easier to extract synergies and cooperation between business units when you have an easier time to meet. That's one of the things that may make it happen. Now, these are things we've done many times before. This is our 10th or 11th acquisition, and we have pretty good models for doing it, and we have a skilled team to do it. Of course, that's one of the reasons that may delay. You should also be a little bit more cautious in this time. Let's see, but we'll work hard on that. Thanks.
Thank you very much. Another question on the WhatsApp side of things, I think you, Oscar, mentioned that the penetration in Latin America is quite high, 90% between consumers. Can you remind us a bit on the differences in the monetization between messages in WhatsApp, Apple Business Chat, Messenger, and SMS? How do these differ for you? Any differences in why, how do you expect this to develop going forward?
Yes. We actually don't do a large differentiation in transmitting a message, because what we see is, if we're just transmitting the message, we can typically charge round about the same markup, regardless of operator charges on the text messaging side or on the actual channel. In the end, the enterprise wants to relay a message to the user saying something, and they're willing to pay a markup over operator or internet provider charges on that. We don't see large differences between the channel. Where we see a large difference is for these new and advanced channel, if you want us to supply an additional software module, for example, to do AI to respond to the message that does an additional service, there you have a large markup depending on what that additional service is.
If that additional service is an AI engine, we see examples of people charging up to SEK 1 per automated conversation. If that software module is a web-based graphical user interface where you can create this message on the web as a marketing user, instead of having to call your developer, which would connect to an API, it may have a lower markup per message, basically. What you're charging for there is the additional software module that you add. In rough terms, that's what we mean with the software value add. Of course, in the early days, you may see a little bit higher markup on new channels because fewer people have access to them, et cetera, and the volumes are lower. In general, that's how we see it. The connectivity business remaining the same, but then adding for the added software value add.
That will also go for in between Apple Business Chat and WhatsApp, and WeChat, and KakaoTalk, and LINE, and Facebook Messenger. We expect those to be relatively similar if we only talk about the message transmission.
Super. That's very clear. I have two more questions. On the M&A side going forward now, is it safe to assume that this could be paused for a bit now, considering you have some integration work to do with the acquisitions carried out last year and now in quite a quick pace. When will you be ready to acquire more companies, would you reckon?
This is a very interesting strategic question that we obviously take at a very high degree of seriousness. We discuss this both internally, and we discuss it with the board. At times, we make pauses, such as after the Mblox acquisition, we actively made a pause and rejected quite a fair number of deals in order to do the integration. Of course, in situations like this, we're concerned about the coronavirus crisis, and in a major economic slowdown, need to be very careful about it. I think it will affect any company in a negative way if you have a major slowdown. We are, as a company who are highly profitable, where 50% of our gross profit, as of today, round about 45%, dropped down to EBITDA.
It is a negative for us with the Corona crisis, but it is also an opportunity because we stand relatively stronger than many other companies. We need to evaluate that very clearly and say, "Hmm, what are we going to do? Are we going to go ahead and add another company, or are we going to hold off for a while?" We definitely have a strategic opportunity to do so, and it is an evaluation we do. It is not so that the opportunities in the market have dried up. It is maybe so in the other direction, because a lot of good companies out there want to be part of a larger, more stable group.
If we can make this type of transaction where we are both diversifying our revenue base, getting a lot of new enterprises in, we are increasing our EBITDA, and we're doing so without increasing our financial leverage because our owners want to support us. Maybe we think there are more deals in the future, but that's very hard to comment on.
Thank you. I think we have more questions on the line, so I think we should move on to other questions.
Okay. Thank you.
Our next question is over the line of Fredrik Lithell, Handelsbanken Capital. Please go ahead, Fredrik, your line is now open.
Thank you very much. Congratulations to a very nice deal. Can I just have a few questions maybe on the sort of logic behind this deal? You made the TWW acquisition in the fall of 2019, and now you go for Wavy. If it would have been the other way around, would you still have gone for TWW, or is it so that they are complementary in a way that still triggered you to have them both on the agenda for your M&A? Could you elaborate a little bit about the differences, geographies, solutions that one have and the other one might not have, and so on? Thank you.
Sure. If you know the future, how would you act? That's a hard question, I'm afraid. It's a little bit hard to answer. Obviously, you don't have that option in business or in life. That's a hard question to answer, but I will answer on the question on the differences, and we do think they complement each other. TWW is a very high-quality supplier of text messaging service in Brazil only. They have a very clear cost focus and a very clear high-quality focus, which we very much appreciate, and we think that will add to Sinch's total global messaging solution. Wavy is also present in Brazil, but they're also present in all of Latin America, which TWW is not.
There it's a clear addition of getting a coverage for rest of Latin America, which is one of the biggest things that are sought after by our big tech customers. The other clear addition is that Wavy has an innovation business, which we're very interested on because it complements the rest of our innovation business, and we can export the use cases to a global level. Yes, there are very clear differences. They both have an operation in Brazil, which we think is good because Brazil is the fifth largest popular country, fifth largest GDP in the world, so therefore it's an interesting country to be strong in.
Okay.
Just one addition comment on that, Fredrik. It's also the fact that TWW we get more synergies because of having more volumes, right? There is a synergy effect of that as well.
Yeah. Thank you. A follow up on that, is it so that you will need, one of the ways to get the synergies out is to move traffic from an acquired platform to your own and close down a platform. You have 2 players in Brazil. Will you keep one of those platforms for the Latin America type of traffic and maybe close one of them and reach some on the technology platform level synergies? Is that fair to assume?
Our strategy is always to be, we're a cloud company, we want to have, as much as possible, one platform, and that platform is Sinch's platform, and that goes for any acquisition we make, including these two. That's the general course of action. We are taking that in a step-by-step manner in order to provide a good service to customers. It's not something we have to do overnight, but long term, that is the obvious best strategy for our customers and our owners.
Another follow-up. The innovation business unit in Wavy, will that be still within your messaging structure, or will it be part of operator or voice and video? Where will that be placed?
Messaging, Thomas, from what we know to today at least, but it's a few months before regulatory approval.
All right.
Messaging is where you should expect it to be.
Okay. Thank you.
Maybe a-
Yeah, sure.
A comment to that. The AI services, you will place in messaging, but they can also be used in the response rate service, you can use also the voice, right? The software layer is actually a layer on top on the channels in general, just so you understand how the logic works.
Okay. Thank you. Just maybe a last one to Roshan. In the last fourth quarter report, it says you have revolving credit of SEK 900 million and then bank overdraft of SEK 200 million. You, at that point, had used SEK 210 million on the revolving credit. Now you add SEK 600 million and you say you have credit lines of SEK 1,850 million, SEK 1.85 billion. Can you fill in the gap for me, what is the missing piece of that puzzle?
Yeah. Sinch has had access to term loans, fixed term loans since before. We're obviously amortizing that over time, and it's reducing, but that's really the gap.
Okay. Thank you.
Thank you very much.
Okay, our next question is over the line of Ramil Koria at SEB. Please go ahead. Your line is now open.
Thank you, operator. Two questions, if I may. Just starting off on the regulatory side. You're merging the second and the third largest player in Brazil. Have you got them, to the extent possible, any flavor that you could provide us in terms of if you've got them any indication of this actually being viable? Have you heard anything from the regulator? I'll stop there.
Yeah. Should I maybe try to answer that, Oscar?
Please do.
Yeah. The first question is, no, we have had no direct communication with the regulator in Brazil. Of course we are, as is normal practice, we have a quite comprehensive acquisition process, doing various kinds of due diligence, and one of them, of course, is looking both from our side and of course from the seller side as well, looking very closely at the competition risk and analyzing that. We are fairly confident, from both sides, of course, given the analysis that we have done and looking at past precedents and information available generally in the market, that we feel that this will be approved by the competition regulator. We will follow the process that is mandatory in Brazil and have a close communication, both with the seller and the competition regulator regarding this process over time.
I think that's what we can say about it at this point in time.
We should add to that, we have obviously engaged with highly recruited competition lawyers in Brazil and gotten legal opinions from both sides on that they think it's a good likelihood. That side we have done in a very diligent matter.
That's very clear. Finally, I'll bake two questions into one, both relating to product portfolio, but just so I get this correctly here, Wavy does not offer voice, video, and personalized video capabilities today. Secondly, it seems like they are offering a customer service platform, which isn't really a core business of yours, least to say. How will you use that, and will you use it? If you do you see any risk of competing with customers and/or channel partners?
First question, voice and video. No, they don't, but they want to. It's a very clear answer to that. Number 2 is, they are not offering a customer care platform in any way, shape, or form that would feel competitive to any large player in customer care. They're offering a platform for doing the handover between the messaging solution and the customer care provider. Sometimes you need to have a simplified web interface to show your enterprise customer, these are the messages coming in. Offering a uncertain customer care from Wavy is not something that any medium or major player would see as competitive.
Perfect. Thank you very much.
Okay. Before we go over to the next question, which is back to Predrag at Carnegie, if anyone else has any further questions at this stage, please do press zero and then one on your phone keypad now. While waiting for any final questions, Predrag, back to you.
Thank you very much, operator. Thank you for letting me back on. Just a couple of follow-ups here. First one on TWW, which you mentioned had a different seasonality than Sinch used to have before. Can you elaborate a bit on the way this one, is it the same like TWW, like Sinch, or is it different? Also, explain maybe a bit on the seasonal patterns, why they are like that way.
Roshan, can you take this, or should I?
Yeah, sure. I can try to. Predrag, I think it's a little bit early to go into very detailed discussion on the seasonal trends in Wavy. I think, from an overall perspective, you should look at it as in a similar way to the TWW business. Because I think Brazil is still a significant market for Wavy, and I think we're affected by overall trends in the Brazilian economy. That would be the short answer.
All right. Super. On your portfolio with solution and new technologies has expanded quite a lot in this past six months. Do you feel content with this now, or what technologies do you feel that you're lacking today that you would like to add to the mix, so to speak?
All right. I'll answer that question. I'll answer it in two ways. One, I feel much more content now, and I hope you see that this fits the way we have communicated before. I think we have taken great strides in both on the internal development and on the M&A front in order to give us the type of offering that we want for the future. On the other hand, when I look at the market and I say, "Hey, the messaging market is SEK 20 billion large, or SEK 200 billion large on the text messaging side alone." What's happening now is the entire messaging market is moving from 160 characters to be able to send an app to your phone with action buttons and flick pictures and videos, and ability to respond, and AI services.
I truly see the benefit to the consumer and to the enterprise using this type of services as, uncertain because it's so much more powerful. The amount of software additions that you can make, I think we have only started, and the opportunity of growing the share of revenue with enterprises, I think we have only started. In the long-term perspective, there is a lot more to do, both internally and externally, and we plan to do so in a responsible manner where we continue to grow profit. I think we have only seen the beginning on this market yet.
Brilliant. Thank you. Thank you very much. That's all for me.
Okay, that's all as well for the questions. Sir, can I just pass it back to you for any closing comments at this stage?
Thomas here. I think we have one question from the webcast. Let me see if I get that right. That's Cassie Mercado asking, "Hello. How much of Wavy's revenue comes from its former owner, Movile?
Okay. That is a relatively small portion. I do not know the exact figure, but it's not something we are concerned about. In the innovation business, Movile has utilized, or Wavy has utilized the fact with close relations to a set of tech companies in the Movile Group in a very, very good way in order to prove a set of use cases. The innovation business also contains a lot of other financial institutions and very large enterprises. They've also proven that they take it to outside the group enterprises in a big way. The reason we used a lot of the cases from the Movile Group is that it's easier to get the deep stats of the business benefit to give officially from people that you're close to. That does not represent the total revenue in the innovation business.
On the text messaging business, it's a very small part.
Just one additional clarification as well on that. A part of the purchase price is being paid through shares, issue of new shares to Movile, so Movile would actually be an owner of Sinch after the acquisition, receiving around 2.5% of the share capital of Sinch. We continue to have that relationship in a different way.
Okay. Do you have any closing comments for today? In that case, this now concludes today's call, so thank you all very much for attending, and you can now disconnect.
Thank you.
Thank you.