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October 29, 2018
Roaming management and revenue assurance expert Mobileum has bolstered its security portfolio with the acquisition of Evolved Intelligence, a Bristol, UK-based provider of hosted signalling firewall capabilities (SS7 and Diameter) and fraud management tools.
The acquisition, for an unspecified sum, gives Cupertino, Calif.-based Mobileum additional capabilities to add to its existing product set, which is built around its Active Intelligence platform. It also provides it with deeper ties to some major network operators: Among its 40 or so customers, Evolved Intelligence counts Deutsche Telekom AG (NYSE: DT) and Orange (NYSE: FTE) as marquee users, as well as KDDI Corp. in Japan and AT&T Mexico in North America.
The combination of the two companies signals the next stage in the development of Evolved Intelligence, says CEO Paul Gill. "We needed to grow internationally. We started looking for a buyer late last year and talked to quite a few companies. What was important was to find the right fit, and that's what we have with Mobileum -- there are a lot of synergies, but not much overlap. Mobileum is a turnkey technology company, focused mainly on analytics and threat detection, whereas we are mostly a managed services company -- it was additive. They are giving us what we need, which is the scale, particularly with our signalling firewall offer," said the Evolved Intelligence CEO. "For us it was important to find a home for our business that could provide scale and where we could provide strategic value," he added.
It deal also brings 35 new staff to the payroll and the chance to help grow Evolved Intelligence's sales potential: The UK specialist has revenues in the single-digit millions and is "at or about break even, as we have been re-investing our revenues for growth," notes Gill. Mobileum (formerly Roamware) is a much larger company with, it says, more than 600 service provider customers: As a private company it does not disclose its revenues, but it was believed to be generating sales in excess of $50 million when it changed its name and was acquired by Audax Private Equity in 2016.
So the acquisition is not about adding significant revenues. The primary reason, though, is not crystal clear, notes experienced network security analyst Patrick Donegan, the founder and principal analyst at HardenStance.
"Mobileum has been dabbling with its own signaling security -- including SS7 firewalling solutions -- for a while now. Management may indeed want to build on the full EI portfolio as stated in today's press release. Then again, they may want to cherry-pick from parts of it. Or they might even want to eliminate a competitor. Given the deployments EI has won with Tier 1 mobile operators, building on the portfolio would appear to be the most likely scenario, but it's not a sure thing. Mobileum's owner is Audax, a private equity firm," notes Donegan in emailed comments to Light Reading.
"With signaling security being such a niche market, Evolved Intelligence was never going to be able to scale rapidly enough on its own. If you take Mobileum's stated intent to invest in the portfolio at face value, then the company certainly ticks a box in terms of giving EI access to greater resources. And in a market of small startups, where EI competes against the likes of NetNumber and Cellusys, scale counts," states Donegan.
"If you look at the two portfolios, certainly the Powerpoint slides tell you there are potential synergies too. In theory, the data sets that the Mobileum Active Intelligence platform draws on should be directly relevant to EI's portfolio, as should the analytics capabilities. But the devil will be in the details -- exactly how will just the relevant data be extracted, ingested and acted upon? And then to what extent will that actually move the needle in terms of an operator's willingness to invest?" asks the analyst.
The acquisition marks the second acquisition in the roaming solutions market in recent weeks: Earlier this month, Starhome Mach and Telarix announced a merger that brings together significant players in the roaming services and fraud management sector. (See Starhome Mach, Telarix Merger Built on Interconnect, Roaming Data.)
Starhome is, and will remain, one of the main rivals to the enhanced Mobileum, while Mavenir and Netnumber are also players vying for mobile operator roaming solutions, revenue assurance and security capabilities.
— Ray Le Maistre, Editor-in-Chief, Light Reading
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