www.synchronica.com
Synchronica plc is a global innovator in next-generation mobile messaging technologies. Its flagship product, Unity, been chosen by more than 100 of the world's leading mobile operators and OEMs to power their own-branded push email, instant messaging, and social networking services.
With leading features such as Unified Messaging, Geo Socialization, and RCS as a Service, Unity connects to any mobile device - from the most basic mobile phone, to high-end tablets - providing customers with a strong foundation on which to achieve market differentiation, diversified revenue streams, and reduced churn.
Headquartered in the United Kingdom, Synchronica maintains global research and development centres in Canada, Germany, India, and the Philippines. Synchronica's shares trade on the London Stock Exchange AIM market (SYNC) and the Venture Exchange of the Toronto Stock Exchange (SYN).
Synchronica buys Nokia messaging business for US$25 million
Next-generation messaging technology firm Synchronica (LON:SYNC, TSX:SYN) has announced it is acquiring Nokia’s Operator Branded Messaging business by way of a reverse takeover.
Already a major supplier of next-generation messaging systems to mobile carriers operating in developing economies such as Latin America and Africa, this latest deal gives Synchronica entry into the lucrative North American market. OBM’s customer list includes Tier-1 mobile operators across the US and Canada such as AT&T, Sprint, Verizon, T-Mobile, Bell Mobility, Rogers Wireless and others – all of whose contracts will be assigned to Synchronica.
The acquisition means that, with the more than 80 existing carrier contracts in Europe, Latin America, Africa, Russia and Asia, Nokia’s assignment of more than 10 operator contracts in North America gives Synchronica a total addressable market will extend to 1.8 billion end users.
As part of the deal, Synchronica and Nokia will enter into a long-term relationship in which Synchronica will provide the messaging software which Nokia will continue to preload on Nokia Series 40 phones. Synchronica will assume responsibility for development, maintenance and support of the Nokia Messaging software shipping with millions of Nokia devices and the gateway functionality for both Series 40 and Symbian devices. Approximately 250 employees, externals and contractors are planned to transfer from Nokia to Synchronica.
The cost to Synchronica of acquiring OBM is US$25 million, with US$4 million payable in cash on completion of the acquisition and the balance being payable on a deferred basis. In addition, Nokia will be issued 18.3 million warrants in Synchronica’s shares.
In order to fund the acquisition, Synchronica is raising US$15 million through a share placing, which will represent approximately 37.6 percent of the company’s enlarged share capital.
The proposed acquisition is judged a reverse takeover under AIM rules, which means that trading in Synchronica's shares is currently suspended. Trading in Sunchronica’s shares is expected to begin again by the end of July.
Carsten Brinkschulte, Synchronica’s CEO, said the acquisition marks a “key milestone for Synchronica” as the firm moves closer to its goal of becoming the leading global player for next-generation mobile messaging. Speaking to Proactive Investors this morning, Brinkschulte said the deal “was transformational from a financial perspective and transformational from a strategic perspective”, explaining that moving into North America forms a key part of Synchronica’s strategy of taking its technology, already established in mobile markets in the developing world, into developed economies.
A key deal for Synchronica in bringing its technology to markets like North America and Europe was its takeover earlier this year of the assets and contracts of Neustar Services. By acquiring Neustar the firm gained instant messaging technologies that have added to its feature set.
Synchronica is already well established in Latin America. Only this month it signed a significant expansion order with an unnamed tier-one mobile phone operator targeting the region. The deal, a group-wide contract, covers the deployment of the firm’s Synchronica Mobile Gateway 6 platform across all of the operator’s Latin American subsidiaries.
This is the second case of a Latin American tier-one operator expanding to a group-wide agreement with Synchronica, further strengthening the firm’s presence in the Latin American mobile market. According to the firm, the expansion order doubles monthly fees, while recurring revenues per active user per month received by Synchronica will increase significantly.
In aggregate, the firm’s contracts with operators in Latin America now cover more than nine out of 10 mobile users in Mexico and Argentina, and five out of every 10 mobile users in Brazil.
The firm also has contracts with all four major carriers in Russia and dozens of carrier contracts in Africa. Last week, Synchronica announced that its Synchronica Mobile Gateway had been used by Airtel Africa to successfully deploy a mass-market mobile messaging service in 16 countries across the continent.
Meanwhile, Synchronica recently teamed up with Indian mobile phone device manufacturer Wynncom to launch a new phone aimed at India’s youth market.
