Kaleyra, a rapidly growing cloud communications software provider delivering a secure system of application programming interfaces (APIs) and connectivity solutions in the API/Communications Platform as a Service (CPaaS) market, today announced it has signed a definitive agreement to acquire mGage, a leading global mobile messaging provider for $215 million in cash and Kaleyra common stock.
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“We are pleased to support Kaleyra’s acquisition of mGage. The newly combined company will be a leading player in the mobile messaging industry and is well positioned to continue the strong performance and growth that mGage has experienced serving enterprise customers under the leadership of CEO, Jim Continenza”
mGage, a Vivial company, is a best-of-breed mobile messaging solution allowing enterprise clients across a diverse range of end-markets to effectively engage with their customers through all mobile channels for a variety of use cases. mGage serves its customers through its cloud-based enterprise mobile messaging platform Communicate Pro, their API solution Connect, as well as Omnichannel mobile messaging offering such as SMS, MMS and RCS.
Communicate Pro is mGage’s cloud-based, enterprise-level messaging platform that connects brands with their customers through all major mobile messaging channels. mGage’s enterprise-grade APIs allow clients to seamlessly build on existing messaging programs without the need for extensive development. mGage is one of only four mobile messaging providers with direct connections to all major U.S. carriers, providing unique network performance and cost advantages.
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mGage’s unique offering supports several of the world’s most valuable brands spanning a diverse range of end markets which has created a solid business model based on recurring message volume and negligible churn. Moreover, mGage’s top-10 clients have an average tenure of over 10 years. mGage’s industry leading product offerings and long-term blue-chip customer base has generated 20%+ revenue growth, 30%+ gross margin profile, high-teens EBITDA margin profile along with generating free cash flow at scale.
“We are thrilled to welcome mGage, its customers, and the entire mGage team to the Kaleyra family. Kaleyra and mGage together are uniting two world class enterprise cloud communications companies to create a top-5 global CPaaS platform with a diversified and balanced product portfolio and geographical representation. On a proforma basis, in 2021 Kaleyra and mGage will process over 50 billion transactions worldwide, with approximately 31% of revenue coming from North America, over 30% coming from Europe and the remainder evenly split between APAC and Latin America. This transaction makes Kaleyra one of the most prominent and geographically diverse CPaaS companies in the world, combining the Omnichannel Kaleyra platform with the complementary mGage footprint and top class customer portfolio,” commented Dario Calogero, Kaleyra’s Founder and Chief Executive Officer. “This combination will accelerate and expand Kaleyra’s opportunity to serve the CPaaS market which is expected to reach $26 billion in 2025 with a compound annual growth rate of 35% and consolidate the A2P Enterprise messaging market which is expected to reach $78 billion in 2022. We expect, on a pro forma basis, the new Kaleyra to generate more than $350 million in revenue for fiscal year 2021, increased scale, an enhanced margin profile and robust free cash flow.”
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