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Syntonic to acquire established mobile commerce business unit in Brazil

Published: 16:25 18 Jun 2018 AEST

brazil market
Opening new markets for future growth

Syntonic Ltd (ASX:SYT) is acquiring the mobile commerce business unit of leading Brazilian service provider in the A2P (application-to-person) sector, Zenvia Mobile Servicos Digitais S.A.

The proposed acquisition includes the core technology platform, operational assets and the assignment of all contracts for a cash consideration of US$700,000 ($940,000).

Syntonic will also pay a vendor earn-out of 20% of the first US$21.5 million ($28.9 million) of contribution margin generated by the acquired assets over 3.5 years.

The acquisition is subject to Syntonic board approval and executing formal binding agreements.

235+ million mobile subscribers

Zenvia’s mobile commerce platform (MCP) is integrated with all major Brazilian mobile operators and accessible to over 235.7 million mobile subscribers.

The MCP enables consumers to make online purchases using the stored mobile credit in their carrier account, known as direct carrier billing.

Zenvia’s mobile commerce business unit generated gross revenue of about $13.95 million in calendar year 2017 and an EBITDA of about $890,000.

Integrating Syntonic’s sponsored data services

Integrating Zenvia’s MCP into Syntonic’s Connected Services Platform (CSP) would provide content providers tools for customer acquisition and engagement, using Syntonic’s Freeway sponsored data and data rewards services.

It would also provide mobile carriers additional revenue streams from mobile commerce and mobile advertising.

Zenvia’s mobile commerce business has an established market presence with ongoing contractual relationships with many of Brazil’s major content providers.

Huge market potential

Syntonic is aiming to establish a new wholly-owned subsidiary to operate the mobile commerce service following completion of the acquisition, which is anticipated in the second half of 2018.

It is estimated that by 2019, total global carrier billing revenue will be worth more than US$24 billion, with US$1.2 billion from Latin America.

Syntonic chief executive officer and managing director Gary Greenbaum said: “Following completion of the proposed acquisition, Syntonic will be the only company with a mobile commerce platform integrated with all of Brazil’s major operators and partnerships with major content providers using the platform service.

“These established relationships form a solid foundation for Syntonic to offer tailored solutions to its partners and an ideal platform to launch Freeway service into Brazil, the ninth largest economy in the world.”

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