Mobile marketing firm Velti is buying Air2Web, which provides mobile CRM (mCRM) solutions in the US and India, for $19m (£12.3m) in cash. Velti has also signed a definitive agreement to consummate the previously announced acquisition of the remaining interest in Chinese mobile ad exchange and network, CASEE, for $8.4m.
Velti says it expects to keep in excess of $12m of annualized revenue from the Air2Web acquisition, the majority of which is derived from recurring platform licensing, usage and performance fees. Velti anticipates that Air2Web will generate approximately $3m in revenue and $1m in EBITDA during the fourth quarter of 2011.
Velti will pay an up-front consideration of approximately $8.4m for the remaining interest in CASEE, made up of $3.9m in cash, and, at Veltis discretion at close, $4.5m in cash or common shares of Velti plc. In addition, based upon CASEE’s financial performance, Velti may be required to pay total contingent consideration of up to $20.7m. Velti anticipates that CASEE will generate approximately $1.5m in revenue during the fourth calendar quarter of 2011.
“Air2Webs mobile CRM platform is attracting and retaining many of the most marketing-savvy Fortune 1000 brands, including, among others, AT&T, Comcast, American Express, HSBC, Barclays Bank and Citigroup” notes Velti CEO, Alex Moukas. “Through this acquisition, Air2Webs customers can now leverage Veltis comprehensive mobile marketing platform and global capabilities to increase the scope, scale, geographic reach and overall effectiveness of their mobile marketing strategies.” 
Velti believes that Air2Webs technology and data reach are very complementary to its own mGage platform. The transaction deepens Veltis US footprint, and gives it improved access to carriers and verticals such as the financial services industry. In India, Air2Web expands Veltis footprint in the second largest mobile market by subscribers, providing Velti with a stronger foundation to continue to service the Indian market.
“The lasting partnerships weve built with trusted global brands have proven the strength, reliability and innovation of our mobile CRM platform and carrier-grade messaging infrastructure,” says Air2Web president and CEO, Jay Sheth. “Together with Velti, Im excited to say we now have the industrys leading end-to-end mobile marketing solution.”
CASEE, founded in 2006, is the largest mobile ad exchange and mobile ad network in China. Velti acquired 33 per cent of CASEE in 2008, giving the company the ability to execute campaigns for global brands in China. CASEE CEO and co-founder, Xin Ye, will continue to lead Veltis efforts in China through CASEE.
