$200m agreement includes long term supply partnership
Singtel Optus Pty Limited (Optus) has entered into an agreement to sell 100% of the shares (Sale Shares) in Optus Insurance Services Pty Limited (OIS) to Likewize Corp. (Likewize). OIS is a wholly owned subsidiary of Optus which provides insurance products for mobile phones and tablets to Optus customers. Likewize is the worlds leading tech protection and support company, committed to making every tech problem painless.
Under the agreement, Likewize will service plans for existing Optus insurance customers and be granted the exclusive right over a 15-year period to supply Optus customers with a new and attractive range of device replacement and upgrade plans, which will provide an ongoing revenue stream for Optus.
As a global leader in device protection, repair, and upgrade products, Likewize is well-placed to ensure a world-class offering and service quality for Optus customers.
Matt Williams, Optus Managing Director Products and Revenue, said Optus has ensured the transition will be seamless for existing Optus Insurance customers, benefit future customers with Likewize innovations that make customer experience effortless, and enable further revenue growth opportunities for Optus and Likewize.
As we aim to become Australias most loved, everyday brand with lasting customer relationships, we always strive to provide customers who have purchased insurance from us with peace of mind and nothing has changed in this regard. This is a strong partnership and Optus and Likewize remain committed to looking after our customers protection needs.
The structure of the arrangement also enables Optus to provide our customers with new, more flexible, and more complete products for device repairs, upgrades and replacements, provided through our partnership Likewize, the worlds leading tech protection company. This means Optus will go further in meeting customer needs, expanding our offering, and growing this part of our business accordingly.
Rod Millar, Likewize CEO, said Likewize is focused on providing these new and future customers with the same comprehensive solutions it offers to approximately a billion customers across the world, and that this agreement and partnership set up both Likewize and Optus for future success.
We have a long history of building trusted relationships with customers in Australia and the opportunity to resolve all the device issues for Optus customers is truly exciting. We are committed to providing solutions quickly and with the highest levels of customer care.
Per the agreement, the initial cash consideration is approximately A$200m, comprising of the following payments to be made to Optus:
A$35m upon completion of the OIS share transfer (OIS Consideration); and
A$165m upon entering into a strategic partnership that grants Likewize the exclusive right to supply Optus customers with a new range of device replacement and upgrade plans for 15 years.
The consideration paid for entering into the strategic partnership is expected to be earned over the partnership term, in addition to an ongoing revenue stream for Optus based on projections of customer growth and take-up of the new services.
The transaction is expected to complete in the second quarter of the 2022 calendar year, subject to regulatory approval.
