Proximus mops up rest of BICS
Business has not been easy for a company such as BICS in recent months and years. The mobile-roaming middleman (or "international communications enabler" if you prefer) has been hit by the double whammy of falling roaming revenue during the COVID-19 pandemic and the ongoing decline in international voice revenue.
Recent attempts to reinvent itself have included a move into so-called application-to-person (A2P) messaging, fraud prevention, the Internet of Things (IoT), cloud communications and more. BICS also acquired TeleSign in 2017, placing it in a stronger position in this telecom-meets-Internet market than it would otherwise be.
Now, shareholder Proximus has decided to take BICS and TeleSign fully under its wing. The Belgian operator has agreed to buy the 20% and 22.4% stakes held by MTN and Swisscom respectively for a total of €217 million (US$262.6 million) and in future will own 100% of BICS.
Swisscom said it "wishes to invest only in strategically relevant businesses" and noted that the commercial contracts between Swisscom and BICS will remain in place. South Africa's MTN will also remain a strategic partner of BICS and said the sale of its stake represents further progress in its asset realization program (ARP), "which aims to reduce debt, simplify its portfolio, reduce risk, improve returns and unlock value."
Proximus said the two shareholders began exploring a potential sale of their shares last year. "After investigation of different options, Proximus has concluded that the best way to have the necessary flexibility to create long-term value for BICS and TeleSign was to acquire 100% ownership of BICS," the operator said.
Notably, it appears that BICS plans to allow the two companies to diverge and follow their own independent growth paths – reflecting the different requirements of the two businesses at this stage.
Proximus said TeleSign "has achieved an impressive double-digit revenue growth year after year" since the acquisition by BICS, and described it as a "fast-growing digital leader specialized in authentication and digital identity services."
BICS, on the other hand, "is set to recover progressively" as measures implemented to slow the spread of COVID-19 are eased around the world.
Proximus said BICS and TeleSign achieved underlying EBITDA of €131 million ($158.5 million) in 2020, as well as free cash flow of €64 million ($77 million). While free cash flow was similar to 2019 levels, EBITDA was down from €153 million ($185 million) in 2019.
EBITDA for BICS alone fell from €126 million ($152.6 million) to €101 million ($122.3 million), while TeleSign achieved an increase from €27 million ($32.7 million) to €30 million ($36.3 million). BICS also saw revenue fall from €1.13 billion ($13.7 billion) in 2019 to €921 million ($1.1 billion) in 2020, while TeleSign revenue increased from €174 million ($210.7 million) in 2019 to €273 million in 2020 ($330.6 million).
BICS also gained a new CEO in recent weeks, apparently because of the "different views on the company's strategy" held by Proximus and former CEO Daniel Kurgan. Matteo Gatta, the former director of network strategy, innovation and partnerships at Proximus, was appointed CEO of BICS in January.
At the same time, Joseph Burton was appointed as the new CEO of TeleSign. Burton previously served as CEO of Plantronics (now Poly).
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— Anne Morris, contributing editor, Light Reading