27 Jul 2009 07:00
2ERGO GROUP PLC ACQUIRES ACTIVEMEDIA TECHNOLOGIES GROUP,
THE MOBILE TICKETING AND COUPON EXPERT,
AND EXPANDS ACROSS INDIA
27th July 2009
2ergo Group plc ("2ergo" or the "Group"), the AIM listed provider of mobile enabling technology, has further expanded its global reach with the acquisition of Activemedia Technologies Limited and its wholly-owned Indian subsidiary Active Media Technologies Private Limited (together "AMT") - leading providers of mobile ticketing and couponing solutions. The purchase follows the successful recruitment of AMT to 2ergo's Business Partner Programme, announced on 26 January this year.
The acquisition gives 2ergo access to the world's fastest growing mobile phone markets, particularly in India, where AMT is currently one of the leading providers of mobile value added services and solutions, deploying mobile coupons, vouchers, ticketing and loyalty programmes.
There are 453 million mobile subscribers1 in India today, approximately six times the size of the UK market, and subscriber numbers are increasing by over 11 million per month1. The Indian mobile market holds vast potential for the 2ergo group, with 10 per cent of subscribers opting for internet enabled mobile devices in a technology leap straight to mobile data.
AMT employs over 50 people and has operations in London, New Delhi, and Mumbai. Its technology platform is integrated into the majority of India's major mobile phone operators, including Airtel, Vodafone, Idea, Reliance and Tata. Blue chip clients include British Airways, Blockbuster, Proctor & Gamble, ABN AMRO, ING, Monster, Hyundai and Western Union. In the UK, AMT also provides the technology behind the highly successful and longest running mobile marketing campaign 'Orange Wednesdays'.
This acquisition follows the purchase of Broca plc by 2ergo in April 2009. As previously indicated, it is expected that the integration of Broca's patented secure end-to-end communication protocol for mobile and wireless data applications, with AMT's patented and award winning technology, could provide clients and partners with groundbreaking security solutions for m-banking, m-commerce and secure m-payments.
The addition of both companies to the Group means 2ergo can extend its mobile ticketing and couponing offering to all territories. There is particularly strong potential in emerging markets such as Asia, Africa and South America for mobile security and CRM technology and therefore the acquisitions of AMT and Broca, together with the recently announced acquisition of Wapfly Technologies Pty Limited in Australia, will open up further opportunities for 2ergo globally.
Barry Sharples, Joint CEO of 2ergo Group plc, commented: "This is a significant deal for both 2ergo and AMT as we can offer each other real competitive advantages. We have been looking to invest in one of the BRIC regions for some time and this deal in one of the world's fastest growing economies provides a platform for further investment and growth for 2ergo in Asia which not surprisingly includes some of the fastest growing mobile phone markets in the world.
AMT's vast experience of mobile ticketing, couponing and loyalty schemes has potential to generate significant future earnings as part of the 2ergo group and to provide added value to our customers globally by enhancing our range of products and services.
Additionally, by bringing AMT and Broca's unique technologies together within the 2ergo portfolio we will be looking to provide the ideal platform to facilitate clients offering e-money and mobile banking solutions throughout India and other territories where the internet and conventional communication infrastructure is limited."
Ariya Priyantha, managing director of AMT added; "Following the success enjoyed by joining 2ergo's Business Partner Programme earlier this year, we are delighted by the opportunities to be gained from being part of the 2ergo group.
2ergo brings vast management experience with a proven track record in developing innovative mobile enabling technology that will lead to accelerated growth for our mobile ticketing and couponing platform globally."
2ergo provides the enabling technology behind major mobile marketing, customer relationship management, entertainment and media campaigns. Its customers include some of the biggest names in world business, such as, O2, ABC Australia, FOX News, Yahoo! and AT&T.
In their most recent results, AMT had sales of £1,190,000 and made a profit before tax of £229,000. The AMT balance sheet had estimated net assets of £550,000 at completion. 2ergo will pay initial cash consideration of £179,000 with the balance of the consideration, calculated as 4 times Indian profit after tax and 2.8 times UK operating profit for the year to 31 August 2012, which will be payable between November 2009 and November 2013, dependent on AMT achieving agreed levels of financial performance and subject to an overall consideration cap. Consideration will be settled, at the discretion of 2ergo, by the issue of new 2ergo ordinary shares, or loan notes, to the vendors.
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| For further information, please contact: | |
| 2ergo Group Neale Graham, Joint CEO Barry Sharples, Joint CEO Jill Collighan, Finance Director | 0161 874 4222 |
| Tavistock Communications Lulu Bridges/Andrew Dunn | 020 7920 3150 |
| Numis Securities Limited As Nominated Advisor, Stuart Skinner | 020 7260 1000 |
| Numis Securities Limited As Corporate Broker, David Poutney | 020 7260 1000 |
1Source: Telecom Regulatory Authority of India