2ergo Buys ActiveMedia

2ergo Group plc, the AIM-listed provider of mobile enabling technology, has expanded its global reach with the acquisition of ActiveMedia Technologies and its wholly-owned Indian subsidiary ActiveMedia Technologies Private (together AMT) which provides mobile ticketing and couponing solutions. The purchase follows the successful recruitment of AMT to 2ergos Business Partner Programme, announced on 26 January this year.

The acquisition gives 2ergo access to the worlds fastest growing mobile phone markets, particularly in India, where AMT is currently one of the leading providers of mobile value added services and solutions, deploying mobile coupons, vouchers, ticketing and loyalty programmes.

According to the analyst, Research & Markets, there are 453 million mobile subscribers in India today, approximately six times the size of the UK market, and subscriber numbers are increasing by over 11 million per month. 2ergo says the Indian mobile market holds vast potential, with 10% of subscribers opting for Internet-enabled mobile devices in a technology leap straight to mobile data.

AMT employs over 50 people and has operations in London, New Delhi, and Mumbai. Its technology platform is integrated into the majority of Indias major mobile phone operators, including Airtel, Vodafone, Idea, Reliance and Tata. Clients include British Airways, Blockbuster, Proctor & Gamble and ABN AMRO. In the UK, AMT also provides the technology behind the Orange Wednesdays campaign.

“This is a significant deal for both 2ergo and AMT, as we can offer each other real competitive advantages,” says Barry Sharples, Joint CEO of 2ergo Group. “We have been looking to invest in one of the BRIC regions for some time, and this deal in one of the worlds fastest growing economies, provides a platform for further investment and growth for 2ergo in Asia, which, not surprisingly, includes some of the fastest growing mobile phone markets in the world.”
In its most recent results, AMT had sales of 1,190,000 and made a profit before tax of 229,000. The AMT balance sheet had estimated net assets of 550,000 at completion. 2ergo will pay initial cash consideration of 179,000, with the balance of the consideration, calculated as 4 times Indian profit after tax and 2.8 times UK operating profit for the year to 31 August 2012, which will be payable between November 2009 and November 2013, dependent on AMT achieving agreed levels of financial performance and subject to an overall consideration cap. Consideration will be settled, at the discretion of 2ergo, by the issue of new 2ergo ordinary shares, or loan notes, to the vendors.