Monitise has bought out joint venture partner VocaLink to take full control of UK mobile banking and payments network Monilink. Monitise will pay an initial £1.5 million in cash over three years for debt-free, 100% ownership of the network.
VocaLink will continue to provide Monilink with access to its banking and payments infrastructure, in return for services fees. The firm could also earn up to £1.5 million in further consideration, subject to Monilink beating financial performance targets, between now and June 2013.
Monilink was formed as a 50:50 joint venture in 2003 by Monitise's then parent company Morse - which later spun the unit off - and the Link Interchange Network.
The network now provides mobile banking and payments services to banks representing over 55% of UK current account holders, including HSBC, Lloyds TSB, NatWest, RBS and Alliance & Leicester.
However, despite signing up major clients, the network posted a loss before tax of £5.7 million for the year ended 30 June 2008 and had net liabilities of £9.3 million.
Monitise - which reported a pre-tax loss of £14 million last year on revenues of £1.5 million - posts its preliminary results for this year tomorrow.
Commenting on the deal, Duncan McIntyre, chairman, Monitise, says: "It gives us full ownership and control of a rapidly growing business in an exciting marketplace."
Alastair Lukies, CEO, Monitise, adds: "Our partnership with VocaLink has established Monitise's world-leading patented technology as the platform of choice for some of the world's largest and most successful companies. We look forward to continuing our excellent relationship with VocaLink and to further establishing the UK at the forefront of the mobile money industry."
In June Visa agreed to take a 14.4% stake in Monitise after signing a $13 million partnership deal with the UK mobile banking outfit.
Under the agreement, Monitise is a strategic development partner to Visa. The five year deal has a contract value of $13 million in addition to ongoing licence, service and development fees.