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Synchronica Buys a Piece of Nokia

Ray Le Maistre
LR Mobile News Analysis
Ray Le Maistre, Editor-in-Chief

British messaging platform specialist Synchronica plc , clearly intent on being more than just a bit-part player in the mobile data services revolution, has opened its purse again to buy a slice of Nokia Corp. (NYSE: NOK) for US$25 million. (See Synchronica to Buy Nokia Unit.)

Following its purchase of Neustar Inc. (NYSE: NSR)'s instant messaging business in February this year, the acquisition of mobile content delivery platform specialist Iseemedia in September 2010 and the purchase of Colibria's IMPS instant messaging business in mid-2010, Synchronica is paying $4 million up front and the remaining $21 million over the next few years for Nokia's Operator Branded Messaging business. The deal, which is expected to be completed by the end of July, will significantly increase the company's revenues, give it a host of Tier 1 carrier customers in North America and raise its headcount by about 150. (See Synchronica Adds Tier 1s With Acquisition, Synchronica Buys Iseemedia and Synchronica Buys Colibria's IMPS.)

The Nokia unit, which provides white-label mobile email and instant messaging services to a range of devices, has 10 live deployments at operators such as AT&T Inc. (NYSE: T), T-Mobile US Inc. , Verizon Wireless , Sprint Corp. (NYSE: S), Rogers Wireless Communications Inc. (NYSE: RCN; Toronto: RCM) and Telus Mobility , with 6 million "active end users." Synchronica says the business is profitable and has "more than 80 percent recurring revenues based on monthly payments per active user."

The acquisition, which is expected to be completed by the end of July, also comes with a partnership that will see Synchronica support Nokia's messaging service for its Series 40 and Symbian handsets, a relationship that's set to generate $18.2 million in revenues for Synchronica during the coming 18 months. In addition, Synchronica will assume 12 U.S. patents and eight further patent applications.

Those revenues alone will make a dramatic difference to Synchronica, which reported revenues of $10.9 million and a net loss of $6.5 million for the full year 2010. The company ended 2010 with 83 mobile operator and eight device manufacturer customers.

In its official statement on the deal, Synchronica CEO Carsten Brinkschulte noted that "Commercially and strategically this is the most significant step forward for Synchronica … The strong market presence of Nokia's Operator Branded Messaging Business is an ideal combination with Synchronica's emerging market leadership, and we are now determined to build a global leader in mobile messaging."

Of course, Synchronica has a number of rivals in the messaging platform market, most notably Acision BV . (See Acision Lands $100M Backing, Dialogue Sets up in Singapore, Mavenir Bags $40M, Buys Airwide, Syniverse Sees Messaging Spike, Jinny Software Grows in 2010, Tango Boasts Record SMS Benchmark and Clickatell Raises $12M for SMS.)

For more on Synchronica, check out these announcements:

— Ray Le Maistre, International Managing Editor, Light Reading

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12/5/2012 | 5:00:42 PM
re: Synchronica Buys a Piece of Nokia

The other side of this, of course, is that Nokia is offloading small chunks of its business - it has already divested the Qt unit



And with the Ovi brand name disappearing - see 

Nokia Dumps Ovi Brand Name



and the changes with Symbian, just how different will Nokia be by Dec 31 compared with Jan 1?

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