Sinch, a global provider of cloud communications for mobile customer engagement, has entered into a definitive agreement to acquire MessengerPeople, a leading German software-as-as-service platform for conversational messaging.
Sinch will pay a total enterprise value of €48m, with a total cash consideration of €33.6m and €14.4m paid in the form of new shares in Sinch.
Founded in Munich in 2015, MessengerPeople offers a cloud-based software suite that makes it easy for businesses to engage with their customers via messaging apps like WhatsApp, Telegram and Apple Business Chat (iMessage). A pioneer in its field, MessengerPeople was amongst the very first innovators to recognise the potential of next generation messaging channels and build software tools for businesses to leverage these capabilities.
More than 700 businesses use MessengerPeople applications to engage with their customers, and around 80% of these businesses are based in the DACH (Germany, Austria, Switzerland) region.
“I’m very impressed with the MessengerPeople team and their success in bringing innovative products to market. Most businesses have yet to discover the benefits of conversational messaging, and together we are superbly placed to win in this market as uptake now begins to accelerate,” comments Oscar Werner, CEO of Sinch.
With easy-to-use applications that are designed for business users, MessengerPeople complements Sinch’s API-based offering for larger enterprises and channel partners. The MessengerPeople platform is particularly well-suited for pre-sales and customer care, which accounts for around 85% of current volumes. Monetisation is based primarily on subscriptions and monthly active users, through a software-as-a-service (SaaS) model, rather than on transaction volumes.
MessengerPeople serves businesses across a broad range of verticals such as eCommerce, Automotive, Public Authorities, and Media. Current customers include travel & tourism leader TUI, e-commerce specialist Women’s Best, and the state government of Telangana, India. In the year ending December 2021, MessengerPeople is expected to generate revenues of €5.1m, Gross Profit of EUR €4.5m, and Adjusted EBITDA of €0.6m. Underlying revenue growth compared to the previous year is expected to reach 35%. The company has around 40 employees and is based in Munich, Germany.
The acquisition builds on Sinch’s ongoing organic investments and previous acquisitions in next-generation, conversational messaging. Integration cost is estimated to SEK16m over 12 months, with targets centered on cross-sales, accelerated geographic expansion, and product integration with Sinch’s communication APIs and related Sinch applications.
“Mobile messaging is simple, quick and interactive – and used by people all over the world. Empowering businesses to use messaging is a tremendous market opportunity, and teaming up with Sinch gives us the size to pursue it on a global scale,” adds Franz Buchenberger, founder & CEO of MessengerPeople.
The transaction is expected to close in the fourth quarter 2021 and will be financed with a combination of new Sinch shares and Sinch’s available cash at hand. Sinch has a financial target to maintain net debt/adjusted EBITDA below 3.5x over time.