CLS announces that it has acquired further shares in Lunarworks AB increasing its shareholding from 5,016,650 shares, representing approximately 47.2% of the issued share capital, to 10,324,000 shares, representing approximately 97.07% of the issued share capital. These shares have all been acquired at a price of €3.74 per share which values Lunarworks at approximately €39,79. The cost of the entire investment for CLS is €24,83 million, providing an annual return of over 10%.
As a result of these acquisitions, CLS is able to compulsorily acquire the outstanding shares not already owned by it.
Sten Mortstedt, Executive Chairman of CLS, owned 665,150 ordinary shares in Lunarworks representing approximately 6.3% of the issued share capital and he has accepted the offer from CLS on the same terms as offered to all other shareholders.
Lunarworks is a private Swedish company which was established in 1999 as a start-up, in which CLS first invested in 2000. It is an internet-based youth community generating revenues from advertising and membership fees and services. In the year to December 2005, it produced revenues of €7.64 million and generated EBITDA of €2.79 million from ongoing operations. Lunarworks launched its UK operation successfully in November 2005. Earnings from ongoing operations grew by more than 30% in 2004 and by 156% in 2005. Earnings are 48% higher in the first quarter 2006 compared to the same period last year. Cash at bank at 31st December 2005 amounted to €3.82 million.
Sten Mortstedt commented:
Lunarworks has grown successfully, is well capitalized and profitable. It is now, expanding internationally and is already generating a good return on investment. CLS has rationalised its portfolio of investments significantly over the last two years and we believe this opportunistic acquisition of the outstanding shares of Lunarworks will providea good return to our shareholders in the future.