PR from MICT about Tingo Merger...
MONTVALE, NJ , June 15, 2022 (GLOBE NEWSWIRE) -- MICT, Inc. (NASDAQ: MICT ) (“MICT”) is delighted to announce that further to the signing of a definitive merger agreement with Tingo Inc. ("Tingo") on May 9, 2022 , it has completed a thorough and extensive due diligence exercise on Tingo and its subsidiaries by leading advisors. Pursuant to this and the completion of the due diligence work undertaken by Tingo on MICT , the parties have entered into an Amended and Restated Merger Agreement.
To advise MICT on the transaction and due diligence alongside its retained advisors, the Company appointed Big Four accounting firm, Ernst & Young , together with the world’s largest law firm and leading global law firm in Africa , Dentons, and No.1 investment bank for global M&A transactions, Houlihan Lokey.
As part of the due diligence work and advisory work on the transaction, Ernst & Young , through its international offices and Lagos office, undertook buy-side Financial Due Diligence, Tax Due Diligence and a Quality of Earnings analysis. In addition, Dentons, through its New York office and Lagos office, undertook Legal Due Diligence, whereas Houlihan Lokey, through its New York office, undertook certain financial analysis and provided financial advice.
Following the completion of its due diligence work, MICT has held discussions with Tingo regarding the accounting treatment of Tingo Mobile PLC’s previous merger with iWeb Inc. on August 15, 2021 (the “iWeb Transaction”). In response to these discussions, Tingo has agreed to change the accounting treatment of the iWeb Transaction under the reverse acquisition accounting rules, instead of the previously used forward acquisition rules. This change of accounting treatment by Tingo has no impact whatsoever on the results of Tingo’s trading company, Tingo Mobile PLC , and nor does it have any impact on the outcome of MICT’s due diligence. The agreed reverse accounting treatment is expected to assist with the preparation of pro forma financial information and the process of completing the Form S-4 Proxy Statement, as is required to be filed under the Security and Exchange Commission (“SEC”) rules.
Darren Mercer , CEO of MICT , stated, “Having engaged some of the world’s leading and most highly reputed accounting firms, law firms and M&A investment banks, the quality of the due diligence and financial analysis we have undertaken on Tingo gives us great comfort. We are also significantly assured by the extensive scope of such due diligence and the related reports, and by the fact that no ‘red flags’ or material concerns have been raised.
“The results of the due diligence, although not unexpected, have given MICT’s Board further confidence in support of their commercial view that the merger with Tingo is a significantly value-accretive transaction for MICT’s shareholders. This view is further underlined by the Q1 2022 results announced by Tingo on May 16 th, 2022, which reported total revenue for the quarter of $257.1m , operating income of $65.5m and Non-GAAP adjusted operating income of $143.9m , and equated to substantial growth quarter-over-quarter. Moreover, Tingo’s high-margin revenues from its NWASSA Agri-Fintech marketplace platform for Q1 2022 of $121.4m , represented an increase of $43.5m or 55.9% over the previous quarter, a trend which we expect to continue throughout the rest of the year, and beyond.
“The combination of MICT and Tingo creates a formidable fintech group and opens many doors for each parties’ business. We are particularly excited to introduce Tingo’s products and platform to China’s huge agricultural market of several hundred million farmers and to its wider population, as well as into other parts of Asia . We are also looking forward to working with Tingo to accelerate the globalization of our own platforms and business verticals.
“One of the many attractions to us of the merger, is the opportunity it gives us to join Tingo in achieving its mission to improve food security, not only in Africa , but also for the populations of China and the rest of the world. In addition, we aim to work together with Tingo in utilizing our strong combined balance sheets and cash balances to identify further synergistic and value accretive opportunities, through which to expand the group and grow shareholder value,” concluded Mr. Mercer .
