LiveWire Mobile, a subsidiary of NMS Communications Corporation, has acquired privately-owned Groove Mobile, the mobile music solutions provider based in Bedford, Massachusetts. LiveWire says the acquisition will enable it to meet operators growing demand for a portfolio of managed services, including ringback tones, ringtones, and full track music and video downloads, delivered through an integrated storefront.
LiveWire notes that its acquisition of Groove Mobile triples its addressable market, and gives it the ability to deliver an integrated music and video solution. It also enables the company to tap into Groove Mobiles significant customers and strategic relationships, and gives it increased scale and an accelerated path to profitability
NMS announced the creation of LiveWire Mobile as a separate division delivering mobile personalisation services to operators in December 2007. NMS has now created a new subsidiary, LiveWire Mobile, Inc., to which it will transfer all the people and contribute all the business assets, including the cash required to fund theacquisition, related liabilities and intellectual property rights associated with the LiveWire Mobile business.
Under the terms of the acquisition agreement, LiveWire Mobile acquired all the outstanding shares of Groove Mobile for the purchase price of $14.5 million, and Groove Mobile shareholders were required to retire all previously outstanding non-trade indebtedness. LiveWire Mobile will hire most of the Groove Mobile employees and the two companies will consolidate office locations.
With the acquisition of Groove Mobile, LiveWire Mobile gains significant new customers, enhances its value proposition to operators and improves its financial profile by adding a rapidly growing base of managed services revenue and accelerating its expected time to non-GAAP profitability into the fourth quarter of this year, says NMA CXChairman and CEO, Bob Schechter. Over the past year, we have taken a series of steps to more clearly delineate and enhance the value of each of our LiveWire Mobile and NMS Communications businesses. Ultimately, we believe the best way to realize value is to separate the two businesses and we are exploring options to do so in the most effective way for our shareholders.
Groove Mobile provides fully-managed, turnkey mobile music solutions for operators and record labels. It has 12 global mobile operator customers, including Sprint, 3 UK and Bell Mobility, as well as relationships with the major music labels, including EMI, Sony BMG, Universal Music Group and Warner Music Group.
This acquisition represents a major milestone in solidifying LiveWire Mobiles early leadership position in the large and rapidly growing market for mobile personalization services, says LiveWire Mobile President, Joel Hughes. LiveWire Mobile now delivers the industrys most complete suite of personalization services, spanning the traditional service silos that exist today.
With the addition of Groove Mobile, LiveWire Mobiles personalization products and services are now deployed in 42 operators around the world reaching more than 260 million subscribers, including 15 million active subscribers.