As Israel's high-tech industry matures, growth of companies through mergers and acquisitions is becoming more and more important. It's true that the local mentality is to rush to sell out as soon as possible, rather than to buy, but at least in some cases, in sectors where the market is already mature and there are opportunities, there are signs of change.
In telecommunications technology, for example, only last week cVidya completed the acquisition of ECtel, and this week, mobile multimedia and advertising solutions company Mobixell Networks has announced the acquisition of US-based mobile Internet company 724 Solutions.
Mobixell did not provide financial details, but according to industry estimates the deal is worth $20-30 million, with a few million dollars being paid in cash and the rest in shares.
The merged company will create a global organization with local sales and support capability in the US, UK, China, Switzerland, India, Israel, and other countries, and with a customer base of over 350 mobile operators worldwide.
For Mobixell, which was founded in 2000 by CEO Amir Aharoni and CTO Yehuda Elmaliach, this is not a first acquisition. At the beginning of 2007, the company bought Adamind from the Emblaze group for $5.5 million.
Mobixell says the expanded company will focus on delivering rich media mobile internet and messaging solutions for mobile operators, enabling them to exploit the opportunities presented by the explosion of rich-media data traffic and the emergence of new exciting communication patterns driven by the ever increasing mobile media consumption on laptops, iPhone devices and other smartphones.
Both Mobixell and 724 Solutions count hundreds of mobile operators amongst their customers, including many tier-1 mobile operators in Europe, North America and APAC, including Verizon Wireless, Vodafone, Orange, Swisscom, Turkcell, AIS and many others. The combined company intends to continue to partner with its strong OEM channels and system integrators such as IBM, Motorola, Alcatel-Lucent, NSN, Huawei, Ericsson, Comverse and many others.
“The recent explosion in mobile data offers a challenge and an opportunity for mobile operators," Aharoni said. " A challenge in terms of optimizing the usage level for bandwidth hungry applications, such as rich-media and video, but more importantly an opportunity to capitalize on the growing revenue potential of mobile data and compensate for the reduction in voice revenues. The combination of expertise and technology between Mobixell and 724 Solutions uniquely positions us to tackle this issue and allow mobile operators to improve the return on their infrastructure investment in the burgeoning mobile internet traffic, expected by industry specialists to grow 66 fold by 2013”.
So far, Mobixell has raised $29 million from Apax Europe, Intel Capital, SMAC Partners, and Comverse, which still has a small stake.
Published by Globes [online], Israel business news - www.globes-online.com - on January 21, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010