Exela Technologies Signs Exclusive Non-Binding Letter of Intent to Create Stand-Alone European XBP Platform

Rhea-AI Summary

Exela Technologies has announced the potential formation of a stand-alone publicly listed EMEA business valued at $220 million. This entity will operate independently and generate approximately $200 million in annual revenue. The transaction is subject to a definitive agreement and regulatory approvals, with no guarantee of completion. The capital raised is intended to support growth and corporate purposes for the new entity on Nasdaq, following Exela's previous announcement regarding asset sales exceeding $200 million.

Positive

• Valuation of the EMEA business at $220 million indicates significant potential for shareholder value.
• The new EMEA entity is expected to generate approximately $200 million in annual revenue.

Negative

• The transaction is non-binding and contingent on negotiations, which introduces uncertainty.
• Completion is subject to regulatory approvals, adding a layer of risk to the transaction.

Exela’s equity stake valued at $220 million, stand-alone EMEA business to be listed on Nasdaq

IRVING, Texas, Aug. 29, 2022 (GLOBE NEWSWIRE) -- Exela Technologies, Inc. (“Exela” or the “Company”) (NASDAQ: XELA, XELAP), a business process automation (“BPA”) leader, announced today that one of its subsidiaries entered into an exclusive non-binding letter of intent (“LOI”) to form a stand-alone publicly listed company of its EMEA business, which has approximately $200 million in annual revenue. The news follows the June 6 announcement in which Exela declared its intention to sell in excess of $200 million of assets.

The equity consideration of Exela’s stake in the proposed transaction is valued at $220 million. The cash to be injected into the EMEA business from the proposed transaction would be used for growth and general corporate purposes by the new, stand-alone Nasdaq listed European business.

Completion of the transaction is subject to the negotiation of a definitive agreement providing for the transaction, satisfaction of the conditions negotiated therein, including regulatory and other approvals. Accordingly, there can be no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated. Readers are cautioned that those portions of the LOI that describe the proposed transaction, included the consideration to be issued therein, are non-binding. Exela only intends to announce additional details regarding the proposed transaction if and when a definitive agreement is executed.

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About Exela
Exela Technologies is a business process automation (BPA) leader, leveraging a global footprint and proprietary technology to provide digital transformation solutions enhancing quality, productivity, and end-user experience. With decades of experience operating mission-critical processes, Exela serves a growing roster of more than 4,000 customers throughout 50 countries, including over 60% of the Fortune® 100. Utilizing foundational technologies spanning information management, workflow automation, and integrated communications, Exela’s software and services include multi-industry, departmental solution suites addressing finance and accounting, human capital management, and legal management, as well as industry-specific solutions for banking, healthcare, insurance, and the public sector. Through cloud-enabled platforms, built on a configurable stack of automation modules, and approximately 17,000 employees operating in 21 countries, Exela rapidly deploys integrated technology and operations as an end-to-end digital journey partner.

Forward-Looking Statements

Certain statements included in this press release are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "may", "should", "would", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", "seem", "seek", "continue", "future", "will", "expect", "outlook" or other similar words, phrases or expressions. These forward-looking statements include statements regarding our industry, future events, estimated or anticipated future results and benefits, future opportunities for Exela, and other statements that are not historical facts. These statements are based on the current expectations of Exela management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties, including without limitation those discussed under the heading "Risk Factors" in Exela's Annual Report and other securities filings. In addition, forward-looking statements provide Exela's expectations, plans or forecasts of future events and views as of the date of this communication. Exela anticipates that subsequent events and developments will cause Exela's assessments to change. These forward-looking statements should not be relied upon as representing Exela's assessments as of any date subsequent to the date of this press release.

Investor and/or Media Contacts:

Vincent Kondaveeti

E: vincent.kondaveeti@exelatech.com

Mary Beth Benjamin

E: IR@exelatech.com

FAQ

What is the valuation of Exela's EMEA business?

Exela's EMEA business is valued at $220 million.

How much annual revenue does Exela's EMEA business generate?

Exela's EMEA business generates approximately $200 million in annual revenue.

Will Exela's EMEA business be listed on Nasdaq?

Yes, the EMEA business is proposed to be a stand-alone publicly listed company on Nasdaq.

What does the transaction mean for Exela shareholders?

The transaction could potentially enhance shareholder value if successfully completed.

What is the status of the transaction for Exela's EMEA business?

The transaction is currently non-binding and subject to negotiations and regulatory approvals.