DoCoMo to Buy Content Delivery Specialist
DoCoMo is offering €6.35 for each Net Mobile share, valuing the company at about €41.6 million ($60.8 million). The Japanese company believes the acquisition, which is subject to a stock acceptance threshold of 75 percent and regulatory approval, should be completed by the end of this month.
The news sent Net Mobile's stock shooting up by nearly 32 percent to €6.23 on the Frankfurt exchange.
Net Mobile provides mobile content distribution and mobile payments services to more than 500 telecom operator and corporate clients. Outside the telecom market, it has partnerships with the major record labels as well as broadcasters and film studios for the distribution of premium music and video content.
Amongst the deals completed in the past year are: The provision of a branded digital store, based on its net-m maxmedia content distribution platform, to German TV broadcaster RTL2; and the distribution of content for Coca-Cola's mobile promotional campaigns.
Net Mobile also has a mobile payments business: That's an area that DoCoMo is developing in its home market as the latest addition to its service portfolio expansion. (See NTT DoCoMo Preps Remittance Service and Pay Buddies by Mobile.)
If the acquisition goes through, which seems likely, as Net Mobile is also keen on the deal, DoCoMo will own a rapidly expanding business that reported a 57 percent increase in revenue for the first nine months of the year to €66.4 million ($97 million). Net Mobile says it expects to break even in 2010.
This year's growth has been driven largely by Net Mobile's September 2008 acquisition of Swiss-based mobile content distributor Minick, which had existing relationships with the likes of Vodafone Group plc (NYSE: VOD), E-Plus Mobilfunk GmbH , and Telefónica Europe plc (O2) for content distribution on their portals, as well as Swisscom AG (NYSE: SCM), which holds a 15 percent stake in Net Mobile it will sell to DoCoMo.
Previously, DoCoMo CEO Ryuji Yamada set a target for 10 percent of the company's revenues to come from outside of Japan within a decade, sparking expectations that Docomo would go on a spending spree. However, Yamada had said the primary target for expansion was in Asia/Pacific. (See DoCoMo Targets Asian Ops.)
Today's announcement follows DoCoMo's acquisition of a 35 percent stake in PacketVideo Corp. , which suggests DoCoMo's international expansion strategy could involve: investments in network operators in emerging markets, such as the purchase of a minority share in India's Tata Teleservices Ltd. ; and the acquisition of content delivery specialists, such as Net Mobile and PacketVideo, that are active in developed markets. (See Docomo Takes Stake in PacketVideo, NTT Goes on an Adventure With Tata in India, and Tata Rolls Out GSM as Tata DoCoMo.)
— Catherine Haslam, Asia Editor, Light Reading