Summary of the synergies of Proximus' acquisition of Route Mobile.
Proximus Group acquired a majority share in Route Mobile on May 8, significantly strengthening its position in the global CPaaS (Communications Platform as a Service) market.
India's Route Mobile brings a leading CPaaS platform with strong omnichannel capabilities and an impressive volume of more than 10.5 billion monthly transactions. The integration of Route Mobile is crucial to Proximus' international ambitions, as it adds the scale needed to realize the full potential of their global communications activities.
The synergies include:
• Improved Efficiency and Growth: Proximus can leverage its scale in the mature P2P Voice & Messaging market to increase efficiency and increase market share, despite declining volumes in that market.
• Healthy Market Growth Trends: Proximus is well positioned to benefit from growth trends in CPaaS and digital identity, with expected annual growth of 10-15 percent and 15 percent respectively.
• Greater Value Chain: By spanning the entire value chain of digital communications, Proximus can connect customers worldwide and provide secure, seamless digital experiences.
• Financial Synergies: The integration will lead to significant synergies, with an expected annual EBITDA synergy of more than 100 million euros by 2026, increasing the EBITDA margin from 9 percent in 2023 to approximately 14 percent in 2026.
• Strong Cash Flow: Due to the low investment intensity and scalable nature of the international activities, the cash conversion ratio will increase to 50 to 75 percent, which contributes significantly to the Group's free cash flow.
Proximus already expects positive synergy effects in 2024, with an expected increase in EBITDA of up to 2 percent on an annual basis. The acquisition is financed by a corporate bond of 700 million euros, which maintains the financial health of the Group.
“The acquisition of a majority stake in Route Mobile is a game changer on our journey to become a leader in the global digital communications market,” said Guillaume Boutin, Managing Director of the Proximus Group. “Driven by our unique position and powerful differentiators, we want to connect, engage and protect our customers in their digital communications and create significant value for the Group.”
