Global mobile payment and mobile identity company, Boku, has conditionally agreed to the acquisition of Estonia-based Fortumo Holdings and its subsidiaries in a deal with a maximum value of $41 million.
The deal brings together two key direct carrier billing (DCB) providers, with both businesses offering payment solutions to customers as part of their phone bills.
Currently, Boku primarily serves large digital merchants and Fortumo primarily serves small and medium sized merchants with higher margins, which Boku said would mean there is limited customer overlap between the two companies.
Boku added that it expects to benefit from Fortumo's lower cost engineering centre, reducing operating expenses.
The acquisition and associated costs will be funded by way of an unconditional placing to raise gross proceeds of up to approximately $25 million, and new bank facilities of approximately $20 million.
Commenting on the deal, Boku CEO Jon Prideaux said: “Boku has always grown by a mixture of organic growth and selective acquisition. This deal, which will be our sixth, cements our position as the scale player in Direct Carrier Billing. It brings together the two most profitable players in the industry, with compatible technology, complementary customers and with a great cultural fit.”
Martin Koppell, Fortumo's chief executive, commented, “Joining the Boku group of companies is a great next step for the Fortumo team, which has built up a world-class, business critical technology platform used by some of the world's leading digital merchants. With a joint strategy, we will be able to better help merchants grow their presence across the world.
“This also represents a fundamental shift in the Direct Carrier Billing market as the reach, complexity, quality and time-to-market for the solutions we build together will be unmatched.”