Avanti Capital to make a loss on MBlox-CLX merger

Avanti Capital announced its disposal of its total investment in MBlox on Friday, as news emerged that the SMS solutions provider has entered into a definitive merger agreement with CLX Communications.

Under the arrangement, CLX will acquire 100% of the shares in MBlox for a cash consideration of $117m, on a cash-free and debt-free basis.

Completion of the transaction - which is expected in early July - is not subject to any regulatory approvals or financing, but is subject to other “customary conditions,” Avanti’s board said.

“Pursuant to the transaction, Avanti has conditionally disposed of its total investment in MBlox, comprising both equity and debt,” its board said in a statement.

“The carrying value as at 31 December of the company’s total investment in MBlox was approximately £3.36m.”

Avanti’s board said the consideration for its total investment in MBlox is $3.8m (£2.6m), payable in cash, subject to customary escrow arrangements for a proportion of the consideration.

As a result, the firm will recognise a loss on disposal of around £0.8m, with the sale proceeds being retained in the company’s bank account.