Tanla Solutions acquire Openbit for $18.6 mn!!

Payments through mobile will soon become reality! Tanla Solutions, a provider of telecom infrastructure, announced its acquisition of Finland-based Openbit OY, a leading provider of global ondevice payments for mobile applications, in an all cash deal for $18.60 million. With the acquisition, the company would be launching new payment services in the country and has initiated talks with all the leading operators. The company is acquiring 85% from the outgoing financial investors and the remaining 15% held by the management is to be purchased by Tanla in two tranches of 5% and 10% after the first and second year, respectively.
Commenting on the deal Uday Reddy, CMD, said, "smart phones are claiming an increasing share of the handset market driving the consumption of richer content formats and increased use of the mobile phone for processing payments. The acquisition of Openbit extends Tanla's payments portfolio beyond operator billing products to address the emerging market for rich media & business applications on handsets."
"Openbit gives us an opportunity to serve more customers in the international markets, and fortifies Tanla as a leading mobile solutions organisation, in line with its vision to become a global end-to-end applications and solutions provider. We hope to integrate our operations at the earliest to benefit from the tremendous synergies available to us," he said.
With this acquisition Tanla would get a strong footing in this burgeoning market with access to pedigree proprietary technology and best in class applications. Besides, it would also be integrating its global aggregator platforms with the acquired company to enable end users to be billed by premium SMS and also help leverage more than 90 operator relationships to facilitate its objective of global connectivity. Both companies would integrate their respective R&D and product development capabilities to introduce new products and services globally pooling on the resources available with Tanla's development centre for professional services including offshore development.
Openbit is recognised as a leading provider of solutions that seamlessly integrate on-device payment and digital rights management (DRM) for mobile applications. The company has a proven business model with a unique value proposition around on-device payment, with an installed base of over 20 million Symbian OS-enabled Nokia handsets worldwide. The company provides software vendors and content distributors with efficient and secure means to distribute and process payment of mobile content for end-users globally. Openbit has established global billing agreements that allow convenient payment of mobile content with nearly 90 operator networks in over 30 countries and with all major credit cards worldwide.
Openbit's clients include Nokia and some of the largest independent software vendors like Symantec, F-Secure and Quickoffice and gaming companies like 3D Arts & Gamelion. For the financial year ended December 31, 2007, Openbit recorded revenues of $15.88 million with an EBITDA of $0.79 million and Openbit had cash equivalents of $3.04 million as of December 31, 2007.
Further, Tanla has identified mobile payments as one its core verticals going forward. Juniper Research estimates the market opportunity to be in excess of $11 billion by 2011 a third of which would be on account of retail and ticketing segments. The drivers for this growth can be attributed to convenience and increasing use of feature rich phones.
Industry estimates for feature and Smartphone shipments by 2011 exceed 870 million registering far higher CAGR as compared with Voicephones. More than one billion subscribers would be using their mobiles for the purchase of both physical and digital goods globally over the next three years.