Route1 Closes the Acquisition of Group Mobile
23 March 2018 - 11:00PM
Route1 Inc. (OTCQB:ROIUF) (TSXV:ROI) (the “Company” or “Route1”), a
leader in secure data protection technologies and user
authentication for government and enterprise, today announced that
it has closed on the acquisition of Group Mobile Int’l, LLC (“Group
Mobile”) from XpresSpa Group, Inc. (“XpresSpa Group”). Route1
announced the signing of the definitive agreement to acquire Group
Mobile (the “Agreement”) on March 8, 2018.
Group Mobile, based in Chattanooga, TN and
Chandler, AZ, supplies rugged mobile technology solutions to
leading automotive manufacturing companies and suppliers, other
leading manufacturing and distribution companies, as well as local
and state governments in the southeastern and southwestern United
States. Route1 is acquiring Group Mobile to:
- Expand Route1’s service and product
offerings;
- Strengthen outside and inside
sales;
- Diversify revenue, customers, and
verticals;
- Expand the use of Route1’s core
technologies into the manufacturing, distribution, local and state
government and respective suppliers; and
- Leverage Group Mobile’s current and
future placement of rugged mobile devices to sell Route1’s core
technologies as an integrated offering.
Under the terms of the Agreement, Route1 issued
to XpresSpa Group 25 million common shares, and 30 million,
three-year common share purchase warrants with an exercise price of
CAD 5 cents per common share. XpresSpa Group now owns
approximately 7% of Route1’s undiluted common shares. The
issued Route1 common shares will not be tradeable until a date no
earlier than 12 months after the closing date:
- 50% or 12.5 million common shares tradeable after 12 months,
plus
- 2,083,333 common shares tradeable each month until 18 months
after the date of closing, subject to a change of control
provision.
In addition, there may also be one or more
payments made to XpresSpa Group based on the actual gross profit of
Group Mobile meeting a minimum threshold in each 12-month period
during the first three years post-closing or for the three years in
aggregate post-closing. Specifically:
- An annual earn-out if the gross profit of Group Mobile is in
excess of USD $3,750,000 per 12-month period, then XpresSpa Group
will receive 27.5% of the actual gross profit amount greater than
USD $3,750,000. If the gross profit target is missed in the
first or second year, no subsequent annual earn-out payment(s) will
be made; and
- A cumulative earn-out that is equal to 27.5% of the Group
Mobile gross profit for the first 36 months post-closing that is in
excess of $11,250,000 less any annual earn-out amounts previously
made. Payments pursuant to the annual or cumulative earn-out
will be made in cash, 90 days after the respective period
end.
Additional transaction terms include:
- No assumption of indebtedness (other than trade payables or
accruals incurred in the ordinary course of business).
- A minimum working capital balance.
- An XpresSpa Group non-compete and non-solicitation for a period
of three years.
- A voting agreement whereby, if XpresSpa Group owns in excess of
3% of the outstanding shares of Route1, all common shares issued as
part of the acquisition are subject to a voting agreement with
Route1 for the term of the earn-out.
Investor Conference Call and
Webcast
Route1 will hold a conference call and web cast
to discuss the Group Mobile acquisition and provide an update on
the AirWatch litigation on Monday, March 26, 2018 at 9 a.m.
eastern. Participants should dial Toll-Free: 1-866-548-4713
or Toll/International: 1-323-794-2093 at least 10 minutes prior to
the conference, pass code 9099535. For those unable to attend
the call, a replay will be available on March 26, 2018 after 12
p.m. at Toll-Free 1-844-512-2921 or Toll/International
1-412-317-6671, pass code 9099535 until 11:59 am on April 9,
2018.
The webcast will be presented live at
http://public.viavid.com/index.php?id=128928
About Route1 Inc.Route1 Inc. is
a world-leader in secure data protection technologies and user
authentication for government and enterprise. Route1
solutions enable the workforce to be more productive and more
flexible without compromising system access, data-at-rest, or
data-in-use. The Company’s suite of patented enterprise
security solutions combines best-in-class authentication, data
security and secure communications with streamlined administration
tools, running on a proven, trusted infrastructure. From
mobile access to business continuity to best-in-class full system
encryption, Route1 offers the most effective, affordable methods to
secure the digital fortress, while meeting or exceeding the highest
standards for government and industry. Route1 has Full
Authority to Operate from the U.S. Department of Defense, the U.S.
Department of the Navy, the U.S. Department of the Interior, and
other government agencies. The Company is also trusted by
enterprise security teams in the banking, healthcare, legal and
education sectors, among others. With offices in Washington, D.C.,
Boca Raton, FL and Toronto, Canada, Route1 serves public and
private sector clients around the world. Route1 is listed on
the OTCQB in the United States under the symbol ROIUF and in Canada
on the TSX Venture Exchange under the symbol ROI. For more
information, visit: www.route1.com.
For More Information Contact:
Tony BusseriCEO, Route1 Inc.+1 416
814-2635tony.busseri@route1.com
This news release, required by applicable
Canadian laws, does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in the United
States. The securities have not been and will not be registered
under the United States Securities Act of 1933, as amended (the
"U.S. Securities Act") or any state securities laws and may not be
offered or sold within the United States or to U.S. Persons unless
registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is
available.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
© 2018 Route1 Inc. All rights reserved. No part
of this document may be reproduced, transmitted or otherwise used
in whole or in part or by any means without prior written consent
of Route1 Inc. See https://www.route1.com/terms-of-use/ for
notice of Route1’s intellectual property.
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