Kaleyra is offering $215 million in cash and Kaleyra common stock to Vivial the owner of mGage, a best-of-breed mobile messaging solution allowing enterprise clients across a diverse range of end-markets to effectively engage with their customers through all mobile channels for a variety of use cases.
mGage serves its customers through its cloud-based enterprise mobile messaging platform Communicate Pro, their API solution Connect, as well as Omnichannel mobile messaging offering such as SMS, MMS and RCS.
It is also one of only four mobile messaging providers with direct connections to all major US carriers, providing unique network performance and cost advantages.
The move would add a layer of mobile-messaging expertise to Kaleyra’s platform, allowing it to extend the reach of its CPaaS offering to give corporates these services alongside a range of unified comms solutions it already offers.
Fuelled by the growing need of brands and companies to reach consumers through mobile messaging channels for marketing and customer service, Keleyra’s move echoes the recent purchase of IMIMobile by unifed comms specialist Cisco, which also is keen to add the mobile messaging dimension to its corporate comms offering.
mGage’s unique offering supports several of the world’s most valuable brands spanning a diverse range of end markets which has created a solid business model based on recurring message volume and negligible churn.
Moreover, mGage’s top-10 clients have an average tenure of over 10 years. mGage’s industry leading product offerings and long-term blue-chip customer base has generated 20%+ revenue growth, 30%+ gross margin profile, high-teens EBITDA margin profile along with generating free cash flow at scale.
“We are thrilled to welcome mGage, its customers, and the entire mGage team to the Kaleyra family,” says Dario Calogero, Kaleyra’s Founder and Chief Executive Officer. “Kaleyra and mGage together are uniting two world class enterprise cloud communications companies to create a top-5 global CPaaS platform with a diversified and balanced product portfolio and geographical representation.”
On a proforma basis, in 2021 Kaleyra and mGage will process more than 50 billion transactions worldwide, with approximately 31% of revenue coming from North America, over 30% coming from Europe and the remainder evenly split between APAC and Latin America.
This transaction makes Kaleyra one of the most prominent and geographically diverse CPaaS companies in the world, combining the Omnichannel Kaleyra platform with the complementary mGage footprint and top class customer portfolio.
“This combination will accelerate and expand Kaleyra’s opportunity to serve the CPaaS market which is expected to reach $26 billion in 2025 with a compound annual growth rate of 35% and consolidate the A2P Enterprise messaging market which is expected to reach $78 billion in 2022,” adds Calogero. “We expect, on a pro forma basis, the new Kaleyra to generate more than $350 million in revenue for fiscal year 2021, increased scale, an enhanced margin profile and robust free cash flow.”
“We are pleased to support Kaleyra’s acquisition of mGage,” adds David Posnick, Senior Managing Director at Blackstone, the controlling shareholder of mGage. “The newly combined company will be a leading player in the mobile messaging industry and is well-positioned to continue the strong performance and growth that mGage has experienced serving enterprise customers under the leadership of CEO, Jim Continenza.”