Advertise with us
[April 07, 2014]
Quindell In Telematics Joint Venture Deal With Motoring Group RAC
(Alliance News Via Acquire Media NewsEdge) LONDON (Alliance News) - Quindell PLC Monday said it has signed a telematics deal with motoring organisation RAC Ltd that will see each of them invest GBP15.0 million in a new company to be called Connected Car Solutions Ltd.
Quindell said it is funding the investment with part of the GBP50.0 million it set aside for acquisitions and investments after its recent GBP200.0 million fundraising, adding that it doesn't foresee any requirement to raise new capital to meet funding obligations for the new company or to fund organic growth.
However, as part of the deal announced Monday, Quindell will issue RAC with warrants over Quindell share with a value of GBP125.00 million.
Under the terms of the agreement, Quindell will own 51% of Connected Car Solutions, with RAC holding the remaining 49% stake, with a further GBP70.0 million to be invested longer-term depending on whether certain criteria are met. Connected Car Solutions is expected to have a small operating cash outflow in 2014, but be significantly operating cash flow generative from 2015 onwards, Quindell said.
Quindell said it has increased its target for paying subscribers to 12.0 million from 10.0 million on the back of the new deal.
Quindell said it has agreed to issue new warrants over 250.0 million shares, with a 50 pence exercise price to RAC, which can exercise them during the next two years based on conditions related to consumer roll-out of the new service.
Quindell shares were Monday quoted at 41.67 pence, up about 6.9%.
Quindell said the provision of the warrants was "to compensate the RAC for the unique positioning Quindell will achieve in the global connected car market, and in recognition of the value which the RAC brand and customer base brings to achieving a critical mass for connected car solutions globally." RAC, a car-breakdown service and insurance provider, is owned by private-equity firm Carlyle Group. It was founded in 1897 and given royal approval by Edward VII in 1907.
"The formation, in association with Quindell, of Connected Car Solutions will enable us to continue delivering groundbreaking solutions into the future. Together, we will continue to improve the customer journey for our members whilst driving down the cost of claims for the industry as a whole," RAC Commercial Director Kerry Michael said in a statement.
"Quindell's technology and integrated outsourcing offering is outstanding, and we believe offers our members and commercial partners a best of breed solution that will enhance their driving experience," Michael added.
Quindell Founder and Executive Chairman Rob Terry said the agreement validates Quindell's business model.
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Back To NFVZone's Homepage