Mobile Embrace buys call centre firm as part of its new direction
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Mobile Embrace has continued a push into performance marketing with the acquisition of a company specialising in sales and call centre conversions for $2.5 million upfront, and another $4 million dependent on performance over two years.
Mobile Embrace (ASX:MBE), founded in 2005, traditionally offered services such as mobile ad campaigns and integrated carrier billing — which lets people buy products and have the cost added to their phone bill.
But since February it’s been warning investors that take-up of carrier billing services was slower than expected, due partly to problems with technical integration. Instead it planned to focus on expanding its performance marketing division.
The company announced on Monday it had made another step in that direction by acquiring C2B Solutions for a total package of $6.5 million, with the upfront payment funded by existing cash reserves.
Mobile Embrace boss Neil Wires told Stockhead the two companies would fit together well, and there would be no job losses as a result of the deal.
“C2B is a performance marketing business that provides clients with high-quality qualified sales leads, and also helps companies improve the effectiveness of call centre conversions of those leads into customers. Its key focus areas include the insurance, finance, education, property and FMCG sectors,” he said.
“The two businesses are highly complementary, and we expect that C2B will be easily integrated into our existing performance marketing operations.
“The best news is that there will be no reduction in staff numbers as a result of this deal. In fact, if anything, we expect that staff numbers will grow.”
In its announcement to the market, Mobile Embrace said C2B had a client retention rate of close to 90 per cent and was forecast to generate EBITDA of $2.5 million for FY2018.
C2B will have to meet its earnings targets over the next two years to receive the additional $4 million.
The acquisition is more good news for Mobile Embrace after it last month settled a legal stoush with GBD Ventures which saw the two companies sue each other.
Mobile Embrace had $7.72 million in cash at the end of 2016. Its shares have fallen in the past year, from around 30c last August to the current price of 7c.