AIM listed WIN Plc has said that it is in discussions with Indian Mobile VAS company IMI Mobile*, which may lead a cash offer for the company at GBP 1.41 per share for WIN. IMI Mobile had raised $13 million from Sequoia Capital and First Mark Capital late last year, its third round of funding, and acquisitions in the EU and USA have been on the agenda. At 10,532,238 ordinary shares of 10 pence each issued, and GBP 1.41 per share, WIN Plc is valued at GBP 14,850,455.

WIN is a UK based mobile services company, partnering with mobile operators like Vodafone, O2, T-Mobile, Maxis, and running mobile marketing campaigns. It provides WAP portal, SMS and MMS alerts, Multi Media Console services with clients like BBC, Yell.com, ADP, Fujitsu, The Guardian, etc. It has 113 employees (at 2009 end) and 5 offices around the world.

IMI Gets Undertaking For GBP 1.41 Per Share From AXA IM UK

While Win says that these are early days, and an offer might be forthcoming – probably a standard caveat – IMI Mobile apparently already owns around 2.37 percent in the company (250,000 WIN ordinary shares through a wholly-owned subsidiary), and has procured an irrevocable undertaking from AXA IM UK in respect of its holding of 18.56 percent (1,955,000 WIN ordinary shares) to accept an offer by IMI for WIN, should it be made, at GBP 1.41p per share. To AXA IM, IMI Mobile will be paying GBP 2,756,550.

The undertaking will not be binding if an offer is not announced by 30th June 2010, or another party makes an offer to AXA, higher by at least 5 percent. As of end of December 2009, AXA was WIN’s largest shareholder, with ISIS EP LLP also holding a substantial stake at 18.48 percent.

WIN has agreed to allow IMI limited due diligence. Brewin Dolphin Investment Banking is IMI’s financial adviser for the deal, while Beaumont Cornish Limited and Arden Partners plc are advising WIN.

WIN PLC: Financials, Acquisitions, Clients, Geographies

Financials

According to its annual report (download here, 3MB), at the end of 2009, WIN Mobile was debt free, with a turnover of GBP 41.9 million (up 9.8% year on year), gross profit of GBP 10.4 million, EBITDA of 2.3 million (down 16.3% from 2.8 million), gross margin of 24.9%.

Given that most of WIN’s revenue appears to be from its New Media mobile marketing campaigns, one probably shouldn’t really look at the gross revenue figure: most of the profit appears to be from its managed services business, which IMI Mobile is probably eying.

WIN services customers in 20 countries, managing 40 million text messages and 4 million picture messages every month. Most of its business appears to be centered around the UK, which is in line with IMI’s target markets (for acquisitions) – Europe and USA. In terms of geography, OnMobile Global, which has partnered with Vodafone across several geographies, should take note that WIN Mobile was selected by Vodafone 360 as a certified application partner across eight launch territories. In January 2008, WIN Plc also acquired Pocket Group Ltd; the acquisition payout details are available in the annual report.

We’re not quite sure of where WIN Plc has a fit with IMI Mobile, in terms of products, but what they do bring to the table are their roster of clients, particularly in the UK. In continental Europe (Greece), but IMI already acquired music downloads and content marketing service DX3 for entering that market. IMI Mobile has previously acquired mobile phone book service Mobyko.

* – Disclosure: IMI Mobile is an advertiser with MediaNama

Download: WIN 2009 Annual Report

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