While the terms of the acquisition were not disclosed, Globo mentions that it was an-all cash transaction and the deal was structured on a debt free and cash free basis. Post this transaction, Sourcebits’ assets of $1.57 million and liabilities of US$0.97 million, including $0.347 million deferred revenue will also be transferred to Globo.
Sourebits will become part of Globo’s Mobility Business Services division (“MBS”), although it will continue to operate under its own brand. Around 167 employees will also move to Globo and key members of Sourcebits’ management and development team will apparently continue in their positions within the new integrated structure.
Globo mentions that this acquisition will provide them access to Sourcebits’ developer resources, customer relationships and brand name, which will apparently allow them to expand its enterprise offerings, particularly in the United States. Sourcebits’ scale will also apparently provide them with more powerful assets to compete for new clients and develop custom mobile applications through its GO! Enterprise platform.
Sourcebits was founded in 2006 and had raised $10 million from Sequoia Capital and IDG Ventures in May 2011. It focuses on service areas like Mobile Roadmap Build which involves consulting and prototype development of new mobile apps, Remodel Software development which is essentially porting an existing app onto the mobile platform, mobile deployment execution services, validation & quality control and maintenance & support services among others.
It has clients like Intel, SAP, P&G, The Coca-Cola Co., Bank of America, Columbia University and Hershey’s. Sourcebits also owns the intellectual property rights for ChocolateChip-UI, an open source framework for making mobile web apps on iOS, Android and Windows Phone.
Revenue: For the year ended March 2014, Sourcebits’s total turnover was at $8.2 million and the EBITDA was at $1.8 million. Revenues from the US market represented 59% of total revenues in 2014, followed by APAC at 21% and MENA at 10%.
While the majority of Sourcebits’ development, sales and marketing personnel are based out of the San Francisco, it has a significant application development and technical support centre in Bangalore.
Globo claims that Sourcebits’ acquisition will also be “earnings accretive” for the first year, since it has apparently secured a significant pipeline of new contracts, although it didn’t disclose any specific details on this.