Mobile Messaging Consolidates: Myriad Group Buys Synchronica For $38M

Some consolidation afoot in the evolving world of mobile messaging: one messaging provider, Switzerland’s Myriad Group, is buying a UK-based rival, Synchronica, for £23.9 million (around $38 million), in what looks like an all-share deal.

Myriad says the deal will make it one of the biggest providers of messaging services in the world. Together they provide messaging services to a huge range of tier-one carriers including ATT, Verizon, Vodafone, Telefónica, Orange, T-Mobile, América Móvil, NTT Docomo, MTS, Softbank, Megafon, Telcel, TIM, Airtel and Claro — altogether covering some 2.5 billion subscribers and 100 carriers and 25 OEMs worldwide.

The two companies have been in negotiations since last November, and in February 2012, Myriad argued to Synchronica shareholders that they needed to sell in part because Synchronica could not meet its repayment obligations to Nokia. Synchronica last year picked up Nokia’s messaging business for $25 million as the struggling handset maker was offloading less profitable assets.

The news comes at the same time as another development in the world of mobile messaging: Openwave has announced it is selling its messaging and mediation business to Marlin Equity Partners for an undisclosed amount and will now focus its business, renamed Unwired Planet, on its intellectual property (200 patents plus an additional 75 applications). It will continue to remain publicly traded.

By coincidence, Openwave once sold a trove of patents to Purple Labs, the mobile Linux specialist, which is now a part of Myriad.

Today’s offer for Synchronica is increased from Myriad’s original terms, and comes at 15 pence per share, compared to an original offer of 12 pence per share.

As part of the deal, Myriad CEO Simon Wilkinson becomes Synchronica executive chairman. Myriad’s CFO James Bodha is now an executive director at Synchronica. David Mason and Michael Jackson, who had respectively held those roles at Synchronica, have resigned with immediate effect.

Messaging services are in a state of evolution at the moment. On the one hand, traditional SMS revenues have been in decline for a while now, as increasing competition carriers has been met with added pressure from other services like BBM on BlackBerry devices, or iMessage on the iPhone, and WhatsApp. Ovum estimates that carriers’ SMS revenues were down by $14 billion in 2011, and that will rise to $23 billion this year.

On the other hand, companies like Myriad (and there are others, too) are working on some very interesting messaging products that are bridging the next generation of mobile services based around smartphones/social media with the fact that there are still a vast amount of people who are still using basic devices, and are living in places without the network connectivity to take advantage of smarter handsets anyway.

Myriad provides, for example, a way of accessing Facebook and other social media services using USSD technology, something built into even the most basic of GSM devices. It doesn’t require data network to be used, but does need the carrier to “turn on” the capability to use it. Myriad in February announced a deal with Orange to offer the service to access Facebook in Africa. It has already picked up at least 400,000 users of the service as it rolls it out across its footprint.

(Orange told me there were already 350,000 signed up in Egypt when the service formally launched, and a Myriad spokesperson tells me that since it went live another 50,000 have signed up.) Last week, Myriad announced that it is extending the service across Asia — which, taken as a whole, only has smartphone penetration of 20 percent — and already is working with Vodafone India to offer it.

Release below:

Myriad Completes Synchronica Acquisition to Create the World’s Biggest Mobile Social Messaging Business

ZURICH, Switzerland – 16th April 2012: Myriad Group AG (MYRN: SIX), the company powering billions of rich mobile social and web experiences on any connected device, today announces it has reached the required shareholder approvals to acquire UK-based Synchronica plc.

“This deal will create a powerhouse in the rapidly growing sector of mobile-social convergence,” said Simon Wilkinson, CEO of Myriad. “It will establish a global service organisation serving over 100 Carriers and 25 OEMs around the world. At a stroke, it increases the addressable base for our award-winning product portfolios to over 1.8 billion subscribers with pre-installation of our products in over 100 million new devices each year.”

Myriad has been in discussions with Synchronica plc since early November – and announced the terms of its offer on January 31st 2012. The two businesses currently serve customers including: ATT, Verizon, Vodafone, Telefónica, Orange, T-Mobile, América Móvil, NTT Docomo, MTS, Softbank, Megafon, Telcel, TIM, Airtel and Claro.

Wilkinson concluded, “I would like to thank our shareholders for their support and collective efforts of Myriad’s staff and its advisors during this process. We look forward to working closely with the Synchronica team as they become part of the Myriad Group.”

[Image: EronsPics, Flickr]