Melbourne customer engagement marketing company MessageMedia is being acquired by Swedish rival Sinch for US$1.3 billion (A$1.7bn).
The deal is made up of US$1.1bn in cash and 1.126 million new shares in Sinch.
MessageMedia offers mobile messaging solutions for SMEs in the US, Australia, New Zealand, and Europe, serving more than 60,000 customers and sending more than 5 billion mobile messages annually.
The business employs more than 350 people and is headquartered in Melbourne, Australia.
This financial year Message is expected to post US$151 million in revenue, with a gross profit of US$94m and EBITDA of US$51m for a gross margin of 63% and EBITDA margin of 34%.
Year-on-year organic growth in revenues and gross profit over the past two years has been around 22% with the business adding 15,000 new customers a month in that market.
Sinch CEO Oscar Werner praised MessageMedia’s management, which had grown rapidly through an aggressive growth strategy of nine acquisitions over the company’s 21 year history.
“Addressing small and medium-sized businesses opens up a new avenue to growth and dramatically expands our addressable market. With MessageMedia as a part of Sinch, we will have the best team in the industry to capitalise on that opportunity”, he said. comments
MessageMedia focuses on products that can easily be deployed ‘out of the box’ without coding or API integrations.
The total market is expected to grow by 25-30% annually in 2020-24, with particularly strong growth in the United States. Small and medium-sized businesses make up around 50-70% of the market.
Paul Perrett, MessageMedia CEO said that mobile messaging delivers tremendous ROI but smaller businesses often lack tools they need.
“Serving these customers presents a tremendous opportunity, and with Sinch we can build a global leader in our field,” he said.
The deal values MessageMedia at an EV/Gross profit multiple of 13.8x, and an EV/EBITDA multiple of 25.4x, with the acquisition financed through a combination of cash, equity and debt facilities.