Nuance Snaps Up SNAPin

Nuance Communications has announced a definitive agreement to acquire privately-held SNAPin, which provides mobile device and server self-service technology, for $180 million (£97 million). With the strengths and resources of Nuance and SNAPin, the company says, the combined organization can deliver innovative, highly-scalable mobile customer care solutions that transform the way mobile operators and enterprises interact with consumers in real-time on mobile devices.

SNAPin is a pioneer in the field of on-device self-service and customer care, with patented technology that provides mobile operators with solutions that help subscribers automatically resolve common problems directly on their handset. Additionally, the software delivers interactive offers and promotions in a relevant, context sensitive way based on how the handset is being used in order to help mobile operators boost usage levels, increase revenue and enhance loyalty.

With this acquisition, says Nuance, it is uniquely positioned to address the significant global opportunity in customer care as it converges around the mobile phone as the primary consumer access point. Companies worldwide will employ more than 6 million agents and spend more than $100 billion in customer care in 2008. In addition, says Nuance, estimates suggest that more than 200 billion calls are placed into customer service numbers around the world every year. An estimated one-third of those calls are placed from mobile phones and the number is expected to grow to two-thirds before the end of the decade. A Nuance and SnapIN combination can deliver effective care for cents-per-call compared to agent-assisted calls that approximate $4.50 per call on average.

“The integration of Nuances mobile solutions and enterprise speech solutions allows Nuance to sharply reduce the costs of customer care and improve the quality of customer experience for mobile operators and large enterprises,” says Steve Chambers, President of Nuances Mobile and Consumer Services Division. “Leveraging the proliferation of mobile devices worldwide, Nuances solutions, combined with powerful technology from SNAPin, enable Nuance to deliver the economies of web-based self-service to the growing expanse of mobile consumers.”

By combining SNAPins key intellectual property, mobile expertise and established device and operator relationships with Nuances capabilities in customer care and handset solutions and longstanding mobile and enterprise relationships, says Nuance, the combined company is positioned to deliver superior mobile care solutions and fulfil a significant global opportunity that has captured the interest of the worlds largest mobile operators.

“We are excited to join Nuance, a dynamic company that shares our commitment to deliver innovative technology and compelling user experiences for the worlds mobile consumers,” says SNAPin President and Chief Executive Officer, Robert Lewis. “Joining Nuance will help accelerate the adoption of our mobile care technology by providing us with deeper relationships with carriers and every major handset vendor, access to expansive complementary mobile technologies, broad intellectual property, deep mobile talent and experience from thousands of successful care implementations worldwide.”
Vodafone is one of the operators using SNAPins software to provide its customers with the ability to automatically resolve common requests, diagnose and repair configuration problems, make account inquiries and solve problems, direct from the handset.

“Delivering a superior customer experience at all touchpoints for our subscriber is key to how we acquire and retain loyal customers,” says Adam Spence, Group Self Service Development Manager for Vodafone Group. “We are excited by the joining of Nuance and SNAPin, as it reinforces our strategy to offer our customers the most innovative and powerful mobile self-service experience across all of our established and emerging markets.”
Nuance expects the acquisition in fiscal 2009 to add between $29 million and $32 million in non-GAAP revenue; $19 million and $22 million in GAAP revenue after adjusting revenue lost to purchase accounting; non-GAAP earnings between $0.01 and $0.02; and a GAAP loss between $(0.05) and $(0.06) including amortization and stock-based compensation.

SNAPin solutions are delivered through the handset in a revenue model based on the value of transactions or calls served on the handset. Nuance has experienced rapid growth in its mobile business for the last several years and now anticipates combined mobile revenues in Fiscal Year 2009 between $260 and $275 million.

Under the terms of the agreement, consideration for the transaction is approximately $180 million in Nuance common stock. SNAPins shareholders will be eligible for additional earn-out consideration based upon the achievement of certain financial and operational milestones. The transaction is expected to close in October 2008, subject to customary closing conditions and approvals, and is expected to be accretive in fiscal 2009.
You can see a demonstration of SNAPins solutions here.