Monitise acquires Grapple Mobile in £39m deal

Mobile banking tech firm Monitise has acquired mobile app developer Grapple for an initial share value of £16.5m, with an additional earn-out consideration of £22.9m, payable on the achievement of performance-related targets - taking the total consideration to £39.4m.

Lee Cameron, Monitise group chief commercial officer said the acquisition marks a “milestone” for the group, adding that it “further cements our leading position as a trusted enabler at the centre of the Mobile Money ecosystem over £39m.

The deal will see Grapple drop its brand with immediate effect, instead coming under the new brand Monitise Create.

Grapple, whose clients include Sky, Procter & Gamble, and B&Q, will retain its 80-strong team, and has confirmed there are to be no redundancies as a result of the deal.

The acquisition will give Monitise, a British company specialising in mobile commerce and payments services, the front-end design talent and capabilities of the Grapple team.

Meanwhile the deal will give Grapple a bigger international reach while opening up a host of opportunities in the mobile wallet and payments space, according to Monitise Create head of strategy Adam Levene.

He told The Drum the move is a “natural fit” for both companies. “Monitise is a hugely ambitious British business in the mobile banking space, and we can inject that front-end creative design side as we understand what the consumer wants. Together it makes a killer proposition,” he said.

Monitise said in a statement: "In a share-based deal, Monitise has acquired the entire issued share capital of Grapple. Initial consideration (net of cash) is to be satisfied by the issue of 28,640,748 Ordinary Monitise Shares, valued at £16.5m based on the closing share price of 53.75p on 4 September, 2013, with an earn-out consideration of up to £22.9m payable on the achievement of aggressive performance-related targets. "

Cameron said: “I would like to congratulate the multi award-winning Grapple team for the great progress they have made in the mobile innovation space. As a young team, they have built a well-deserved reputation as the go-to company for cutting-edge mobile design and strategy services for some of the world’s leading brands across not only financial services but also in retail, leisure and media.”

The news follows the appointment of retiring Visa Europe CEO and president Peter Ayliffe as its new chairman.

Revealing its preliminary results today, Monitise revealed that full-year revenue more than doubled for the fourth year in succession, rising to £72.8m from £36.1m, an increase of 102 per cent.