Buying? Selling? Merging? GTC’s Mergers & Acquisitions division is the only place to get unbiased and informed advice

Not many people know it, but when Sinch (then CLX) bought Symsoft in 2009, it was operating out of a Caribbean travel agency in Stockholm. Well, we all have to start somewhere.

Things are pretty different now of course. In 2021, Sinch acquired Inteliquent and MessageMedia for over $1bn, MessengerPeople for €54m, and Pathwire for almost $2bn. It also received a $1bn cash injection in March to finance future deals.

As of January 2022, Sinch had a market cap of $7.45 billion.

Sinch makes a lot of headlines thanks to its activity in the CPaaS Mergers & Acquisitions space. But it’s far from the only one. Take its near neighbour Norway’s Link Mobility. Between 2016 and 2021, it acquired Responsfabrikken, Message Broadcast, Tismi, Altiria, Netsize and many more. And in the middle of all this Link Mobility itself was bought – by the US venture capital fund Abry Partners – for €357 million.

Organic growth is not enough for the shareholder class

These deals, and many others, reflect the land grab taking place in the A2P messaging and CPaaS sectors. In fact, in the 18 months to June 2021, there were more than 30 significant M&A and equity transactions.

The marketplace for business messaging and cloud-based communication services is growing. According to Juniper Research CPaaS alone will gross $25 billion in 2025 (up from $7 billion in 2020).

Still, for all the upwards momentum, the potential for organic growth is limited. Margins are tight and the market is crowded with participants. For these reasons, M&A has to be on the menu – especially when there are shareholders in the mix.

And yet not every company has the skills or capacity to manage this process alone. It takes a deep understanding of the market to know where the opportunities are, and which companies make good acquisition targets (and are willing to sell).

Unbiased advice and insider knowledge – GTC enters the Mergers & Acquisitions space

Without a doubt, there is a knowledge gap. Which is why GTC now offers a dedicated Mergers & Acquisition advisory service. We launched last September.

It was a logical move for us. GTC is the world’s only independent and unbiased messaging consultancy. We started the company to help others develop their own messaging solutions – to offer them assistance with technical questions, staff hiring and training, strategic direction and so on. Inevitably, our customers began to ask us about Mergers & Acquisitions. Hence the new division.

The way we see it, there are a variety of factors shaping the evolution of Mergers & Acquisitions activity in our industry.

One of the most significant is the flowering of the enterprise market. Corporate communication tends to offer better margins than that of wholesale voice and messaging. It’s also a little less risky. Enterprise customers are far less likely to switch suppliers overnight.

Our multinational team can identify the best local targets

However, the enterprise messaging market is still very localised in many regions. For acquirers this can be a challenge. We can help. We have team members from all over the world who have deep domain knowledge of their regions – and they speak the native language, of course.

What’s more, we have the operational expertise to get possible targets into shape for purchase. For example, we are working with one company that is active across several countries. In each one it runs an independent legal entity – a set-up that adds complexity for any potential acquirer. We are helping it to re-organise, moving the shares into a single holding company that will simplify the buying process.

Another important dynamic in the market is the rising interest from telcos and ‘external’ parties such as VCs and private equity. These companies have observed the profitability and growth potential in CPaaS – and the opportunities in the post-pandemic world of digital commerce – and they want in.

Just a few months into our Mergers & Acquisitions advisory journey, we already have three deals in progress. We’re aiming to complete four to five a year at a deal value of between $60 million and $80 million.

To summarise our offering, we provide help in four areas:

Mergers & Acquisitions

There are many factors to consider when identifying a target. Cost, of course. But also strategic objectives, synergies, organisational and cultural fit. Then there’s the feasibility of a deal. Is the target even for sale? Clients should also think about what happens after a successful acquisition. There’s often a question around how to integrate different technical platforms – as well as how to integrate different teams of people. GTC’s Mergers & Acquisition team can assist with all these questions.

Alliances & Joint Ventures

You don’t always need to buy to enter a new market. Alliances and joint ventures provide an alternative. We will analyse a client’s needs and match them with an appropriate business partner.

Merger Management

The maximum deal value is the goal here, along with cultural compatibility, the potential to boost client capabilities, and speedy execution. We take a broad view of merger management, supporting clients from pre-announcement planning through to post-close integration.

Divestitures

For every buyer, there’s a seller. We help clients assess their portfolios so that they can better understand their core and non-core businesses. And if they decide they are ready to sell, we can identify potential acquirers, advise on possible deal structures, negotiations, post-transaction impact, and more.

If you are thinking about buying, selling, merging or forming an alliance, get in touch.

Global Telco Consult (GTC) is a trusted independent business messaging consultancy with deep domain knowledge in application-to-person (A2P) services. GTC provides tailor-made messaging strategies to enterprises, messaging service providers, operators and voice carriers. We have expertise in multiple messaging channels such as RCS, Viber, WhatsApp, Telegram and SMS for the wholesale and retail industry.

GTC supports its customers from market strategy through service launch, running the operations and supporting sales and procurement. The company started in 2016 with a mission to guide operators and telcos to embrace new and exciting opportunities and make the most out of business messaging. For more information or industry insights, browse through our blog page or follow us on LinkedIn.

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