Silverlake Axis Ltd (SGX:5CP) entered into a conditional sale and purchase agreement to acquire 80% stake in X Infotech Group, Sia from Novaltisco Investments Limited for €17.6 million on November 9, 2018. The consideration comprises an initial consideration of €17.6 million which will be paid as, €14.61 million within 5 business days after each and all of Silverlake Axis Ltd’s conditions precedent are fulfilled while the remaining sum of €2.99 million will be deferred and where the earnings before interest and taxes (EBIT) of X Infotech Group, Sia shall show a growth of at least 20% (TGR 1) based on the agreed average base EBIT of X Infotech Group, Sia for financial year ended December 31, 2016 and financial year ended December 31, 2017, amounting to €1.74 million, Silverlake Axis Ltd shall pay a sum equivalent to 60% of the deferred amount within 45 days from the date the audited consolidated accounts of X Infotech Group, Sia for the financial period commencing January 1, 2018 and ending June 30, 2019 (FY2019) are made available, where the EBIT of X Infotech Group, Sia for the financial period commencing July 1, 2019 and ending June 30, 2020 (FY2020), shall show a year on year growth of at 25% (TGR 2), Silverlake Axis Ltd shall pay a sum equivalent to 40% of the deferred amount, within 45 days from the date the audited consolidated accounts of X Infotech Group, Siafor the said financial year are made available and where X Infotech Group, Sia fails to achieve either TGR 1 or TGR 2 but the average growth rate of the EBIT of X Infotech Group, Sia for FY2019 and FY2020 meets or is in excess of 22.5%, Silverlake Axis Ltd shall pay the remaining or the entire deferred amount within 45 days from the date the audited consolidated accounts of X Infotech Group, Sia for FY2020 are made available subject to the growth rate of the EBIT of X Infotech Group, Sia for the financial year in which the target growth rate was not met being at 15% or more. If the conditions in relation to the deferred amount are not achieved or met, the deferred amount shall not be payable. In addition, there is an earn-out consideration. The maximum earn out consideration is payable where X Infotech Group, Sia is the subject of an initial public offering and certain conditions, including the achievement by X Infotech Group, Sia of certain profit growth targets over the next 3 financial years, are satisfied. The earn out consideration payable shall be a sum calculated at 12 times of X Infotech Group, Sia’s financial year 2021 EBIT multiplied by 80% (being the stake of X Infotech Group, Sia to be acquired), deducted by the amount paid in respect of the initial consideration. Under the transaction, Silverlake Axis Ltd will acquire 2,276 ordinary shares of X Infotech Group, Sia. Upon the completion of the transaction, X Infotech Group, Sia shall become a subsidiary of Silverlake Axis Ltd. The transaction is conditional upon the fulfillment of various conditions precedent, including, inter alia, satisfactory due diligence, the key executives and all other employees of X Infotech Group, Sia having entered into fresh employment contracts or amendments to the employment contracts, approval from Competition Authority in Kenya for the transfer to X Infotech Group, Sia of all of the shares in X-Infotech Africa Limited held by Paul Ng'ang'a Waihumbu and David Kanyanjua Kamau respectively, approval from Competition Authority in Latvia and Kenya for the transaction, sale of shares in X Infotech International GmbH, X Card SIA and X Infotech Systems sp.ZOO by X Infotech Group, Sia, documents to be provided for deed of acceptance by clients relating to advances received from customers as shown in X Infotech Group, Sia’s accounts, execution of a shareholders’ agreement and provision of documentary evidence suggesting that X Infotech Group, Sia has set aside an amount of €1.2 million in readily available funds to meet the minimum amount of cash and cash equivalents to meet its working capital requirements. The conditions should be satisfied on or before the date falling 3 months from the date of execution of the agreement, or such other date as the parties may agree, in writing, from time to time, subject to a maximum period of 6 months from the date of execution of the agreement. Boardroom Corporate & Advisory Services Pte. Ltd. acted as share transfer agent for Silverlake Axis Ltd. Silverlake Axis Ltd (SGX:5CP) completed the acquisition of 80% stake in X Infotech Group, Sia from Novaltisco Investments Limited on January 25, 2019. The upfront amount of €12.61 million was paid to Novaltisco Investments Limited on the completion date. As of January 24, 2019, a supplemental letter was entered into by the parties whereby the upfront amount of consideration of €14.61 million was revised to €12.61 million, with the remaining sum of €2 million to be payable within 45 days from the date the audited consolidated accounts of X Infotech Group, Sia for FY2019 are made available provided that the audited profit before tax of X Infotech Group, Sia for FY2019 is not less than €0.72 million. The total amount of deferred consideration is therefore €4.99 million now. Under the terms of the agreement, there will be concurrent call and put options, in favour of Silverlake Axis Ltd and Novaltisco Investments Limited respectively, over the remaining 20% of the issued share capital of X Infotech Group, Sia.