The integrated Internet media group Hi-Media (ISIN Code FR0000075988 - HIM, HIM.PA) enters the mobile multimedia market by acquiring Mobile Trend.
Mobile Trend, a company established by Damien Dupouy and Thierry Peyre in 2003, is a French specialist in mobile Internet and in micro-payments by SMS.
Cyril Zimmermann, CEO of Hi-Media Group, comments that “Mobile Trend’s contribution represents an enormous opportunity for us in terms of both skills and synergies. The collaboration between our respective teams will enable us to develop on the mobile Internet market Hi-Media’ strategy which aims at creating an integrated media group based on a strong advertising network and the leading micro-payment platform. We’ve been working with Mobile Trend for more than four years now. The teams know each other very well and everybody is glad to be able to work hand in hand to implement the projects and synergies already identified within the same group. By this acquisition we enter the mobile Internet industry, one of our five-year objectives announced during our 2007 earnings release.”
The Mobile Trend contribution enables Allopass, Hi-Media’s micro-payment business, to firm up its leadership in the SMS segment
With almost 3 million SMS routed per month (making more than 1 per second), together with Mobile Trend, Allopass becomes the French leader in micro-payment by SMS. This positioning will naturally strengthen Allopass commercial position and produce some economies of scale. This acquisition will also make it possible to implement some new payment solutions for the content available on the mobile Internet.
Hi-Media’s advertising network will benefit from a unique know-how in the mobile Internet
Thanks to Mobile Trend, Hi-Media is going to be able to position itself on the emerging mobile advertising market. The advertising network is gradually going tooffer special operations to advertisers, as well as games and direct marketing projects combining Internet presence and mobile multimedia sites.
Hi-Media publishing is going to develop its main sites in the mobile Internet thanks to Mobile Trend
Mobile Trend is among the leading French publishers of mobile Internet sites (wap). In May, Mobile Trend was among the top 10 players for the three main French telco operators (source: Orange, SFR and Bouygues Telecom). Mobile Trend publishing activity represents more than 150 000 unique users per month, more than 130 000 paid transactions processed and more than 80 million pages views per month (source: telco operators, Mobile Trend).
The integration of this business into Hi-Media Publishing will enable to develop all existing websites into the mobile Internet field and to create som new dedicated ones. Such synergies are already becoming a reality with the launch, in the next few days, of the fotolog mobile Internet site (wap) (m.fotolog.com).
Damien Dupouy, CEO of Mobile Trend, declares that “the alliance of Hi-Media, the European leader in Internet audience monetization with Mobile Trend, a leader in mobile Internet audience monetization, creates some very interesting growth and synergies prospects. Our teams know each other very well, and we are excited to get to work on the various joint projects already identified. Since the mobile Internet market is booming, there’s a lot to do.”
An acquisition financed in cash
The entire Mobile Trend share capital has been acquired for a total consideration of 7 million euros, paid in cash, with two earn-outs to come depending on the company’s profitability in 2008 and 2009. In 2007, Mobile Trend posted sales of 4.1 million euros and an operating profit* of 0.9 million euros, and it expects strong business growth in 2008.
The company transaction valuation multiples should be between 8 to 9 times Mobile Trend operating profit for the current financial year. The entire acquisition will be financed the company cash available and by drawing on part of the syndicated credit line of 41.5 million euros signed in October 2007. This means that the company will not make any capital increase to do this acquisition.
With its growing activity and thanks to the anticipated synergies, Mobile Trend will contribute to the Group’s growth and operating profitability which is expected to exceed 20% in 2012. For the current financial year, its contribution will enable Hi-Media to post consolidated sales exceeding its initial guidance of 140 million euros, which was recently confirmed before taking any account of this new subsidiary’s activity.
The company will release quarterly sales figures on 22 July 2008.
* Normative data restated on the basis of the IFRS standards
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