Syniverse to Buy MACH for $693M

Syniverse Technologies LLC is to buy rival MACH for €550 million (US$693 million), bringing together two of the main companies that enable mobile roaming and associated financial clearing services.

Syniverse, which serves more than 750 service providers and 150 enterprise customers via its mobile interconnect hubs, says MACH, which has about 650 customers, will give it a range of new Service Provider Information Technology (SPIT) capabilities such as fraud prevention, revenue assurance and real-time analytics. (See A Roaming Holiday, MACH Unveils Telco Data Retention Offer, MACH Offers M2M Revenue Protection and MACH Boasts Tier 1 Fraud Control Deal.)

Some of those capabilities will be relatively new to the MACH portfolio, as the Luxembourg-based company acquired revenue assurance specialist Optel Informatik just a year ago. (See M&A Trend Continues.)

Syniverse, which was acquired by The Carlyle Group LLC for $2.6 billion in January 2011, generated first quarter 2012 revenues of $185 million and net profit of $4.5 million, according to SEC filings. It ended March this year with about $232 million in cash.

Privately-held MACH's financials are unknown.

Syniverse expects the deal to boost its profits within a year of closing the deal.

Barclays (currently something of a toxic brand), Deutsche Bank, Credit Suisse and Goldman Sachs will provide debt financing for the transaction.

Why this matters
Syniverse and MACH provide services that are absolutely essential to the world's mobile operators: Without the roaming hub services these companies provide, mobile operators would face enormous challenges offering services outside their domestic markets.

Bringing two of the main players together will create a very stable mobile interconnect powerhouse, but also limits the options for all the companies that use their various services (cable operators and enterprises too).

The two other main mobile interconnect players are Comfone AG (more than 300 customers) and, to a lesser extent, multi-sector interoperability services provider Transaction Network Services Inc. (NYSE: TNS) (TNS). The question is -- what sort of impact does a Syniverse/MACH merger have on those companies, and the world's mobile operators, in a market experiencing major cross-border mobile data traffic growth?

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— Ray Le Maistre, International Managing Editor, Light Reading