Monitise aims to be "world's largest" m-money player with acquisition

UK mobile payment technology and services provider Monitise has announced plans to acquire US based counterpart Clairmail, in a bid to create the “world’s largest pure-play mobile money company”.

Monitise will pay $173m for the acquisition, which is conditional upon US regulatory and shareholder approvals, and the firm expects the deal to be completed before the end of the financial year 2012.

Between them, the two firms currently provide mobile money services to 13 million registered consumers via financial institutions such as the Royal Bank of Scotland Group, Lloyds TSB, PNC Bank, US Bank and Fifth Third Bank, among others.

One third of the top 50 North American financial institutions, including eight of the top 13, are using either Monitise or Clairmail’s services, as well as hundreds of smaller and medium sized financial institutions, the firm said. It added that the deal will provide the ability to offer enhanced product functionality to US financial institutions and a far broader product roadmap.

Clairmail’s management team and employees are expected to remain with the enlarged firm, with Pete Daffern, CEO at Clairmail, working closely with Frank D’Angelo, executive chairman at Monitise to focuse on accelerating growth opportunities in the US. Following the acquisition, Monitise will have 600 staff across North America, Europe, the UK, Asia-Pacific, Africa and India.

Clairmail’s revenues grew by 90 per cent in calendar 2011 to $18m and combined pro forma revenues for calendar 2012 are expected to be close to $100m. Before the end of calendar 2013, Monitise expects the acquisition to break even in terms of earnings beforee interest and tax, with gross margins in excess of 70 per cent by June 2013.

“Combining Monitise and Clairmail substantially accelerates our already strong position in one of the world’s leading banking and payments market, namely the US,” said Alastair Lukies, group chief executive at Monitise.

“With a population of 314 million and over a 100 per cent mobile phone penetration, it is anticipated that 111 million US consumers will be using mobile banking by 2016 while mobile commerce revenues are forecast to hit $31bn in 2016.  The future of payments, the internet, retail and social networking is all mobile.”

Last year, financial services provider Visa Europe invested $39m in Monitise, and earlier this month said that it intends to take a 15 per cent stake in the Mobile Money Network (MMN) – a joint venture between Monitise, Best Buy Europe and Carphone Warehouse, and telecoms entrepreneur Charles Dunstone.

Look out for our special focus on mobile financial services in April, on Telecoms.com and in Mobile Communications International.