After seeing a faltering financial situation in the previous quarter, Norwegian browser company Opera was out seeking buyers for a proposed acquisition. The company had even received an offer of $1.2 billion from Golden Brick Silk Road, a Chinese investment fund and consortium of popular Chinese internet companies.
But the company has today announced that the acquisition deal has fallen through and the same group is now paying $600 million to buy only certain parts of Opera’s software business.
The Consortium of Chinese Internet companies led by Qihoo 360 Software has agreed to buy out Opera’s browser business(including both mobile and desktop browsers), the performance and privacy apps, it’s technology licensing business and the company’s 29.09 per cent stake in Chinese joint venture nHorizon. Other members of the Consortium include, Kunlun Tech Limited, Future Holding L.P., Qifei International Development Co. Ltd., and Golden Brick Silk Road Fund Management.
The business that has been acquired by the Consortium includes all assets of the company related to the same. This means that all assets including employees, rights, obligations as well as support & distribution teams and PR will also fall under the transaction.
A source close to the development told TechCrunch that, This part-acquisiton deal also carries with it the Opera name and trademark. The remaining business will have about 18 months to find a new name. The remaining businesses left with the Norwegian Internet company includes Opera TV, Opera Mediaworks, and Opera Apps & Games (including Bemobi).
The complete $1.2 billion acquisition didnt go through as planned because the Norwegian company failed to obtain the required regulatory approvals by a July 15 deadline, says the press release. There is however no mention of the government or regulatory body which it lacked approval from.
Opera’s CEO Lars Boilesen will continue to act as the CEO of both Opera and it’s sold consumer businesses until the end of this year. Commenting on the sale for part of its business, he adds that,
We all tried very hard to close the public offer and are naturally disappointed that we were unsuccessful. However, we believe that the new deal is very good for Opera employees and Opera shareholders.
The Consumer part has good fit with objectives and strategy of Consortium, and will become part of ecosystem with substantial investment capacity. For Opera shareholders we are selling approximately ¼ of the company for $600m, which is an attractive price for this part of our business.
The board of directors of the company are all in favor of this deal, and the partial acquisition is expected to be completed by Q3 of this year. The drop date of the transaction is currently set at 31st October 2016, but can be extended to the end of this year.
In addition to this, the press release also sheds light on the financials of the part of the business remaining with Opera. These businesses represented more than two-thirds of the company’s revenues in 2015, with sales of $467 million and adjusted Ebitda of $74 million. And it expects to deliver a similar result in this fiscal year of FY17.
This partial acquisition also reduces some pressure and carries off the burden off the Norwegian giants shoulder. The company can now work with the Consortium to extend its services to the extensive internet user base of Kunlun and Qihoo in China. Moreover, Opera also has a presence in mobile advertising business which now also includes app install ads which can benefit Qihoo 360 as it monetizes its apps through advertising.