UK mobile money outfit Monitise has agreed a £109 million, all-share deal to buy privately-held US counterpart Clairmail.
Monitise will issue 312,787,144 new ordinary shares representing around 26.5% of the enlarged firm based on its share price of 35 pence at the close of trading on Friday. The deal, conditional upon US regulatory and shareholder approvals, is expected to close by the end of the financial year.
The acquisition gives Monitise a huge boost in the North American mobile banking and payments market, where Clairmail claims a third of the top 50 banks, and hundreds of smaller players, as customers.
This established Clairmail presence, combined with Monitise's partnerships with its shareholder Visa and fintech giant FIS, positions the merged group to take advantage of the expected boom in US mobile money services over the next few years.
Between them, the two companies already provide services for around 13 million registered end users through banks such as Royal Bank of Scotland, Lloyds TSB, PNC Bank and US Bank. Their combined technology platforms process billions of transactions a year and over $10 billion of payments and transfers on a current weekly annualised basis.
Clairmail's management team, led by CEO Pete Daffern, and employees are "expected" to remain with company, which will have around 600 employees across North America, Europe, the UK, Asia-Pacific, Africa and India.
In 2011 Clairmail's revenues grew by 90% to $18 million with an Ebitda loss of $21 million. Before the end of calendar 2013, Monitise expects the acquisition to be earnings accretive and the group to hit Ebitda breakeven, with gross margins in excess of 70% by June 2013.
Alastair Lukies, chief executive, Monitise, says: "Combining Monitise and Clairmail substantially accelerates our already strong position in one of the world's leading banking and payments market, namely the US. With a population of 314 million and over a 100% mobile phone penetration, it is anticipated that 111 million US consumers will be using mobile banking by 20167 while mobile commerce revenues are forecast to hit $31 billion in 20168. The future of payments, the internet, retail and social networking is all mobile."