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Syniverse inks $175M deal to acquire VeriSign

VeriSign Inc. is selling its messaging business to Syniverse Holdings Inc. for $175 million in cash.

The deal is subject to working capital adjustments and certain closing conditions and regulatory approvals. The proposed acquisition will combine Syniverse's Next Advanced Messaging Hub and other mobile messaging offerings with four of VeriSign's carrier and enterprise messaging services.

"This cash transaction is strategic, as mobile messaging transactions continue to increase in volume and affect corporations," said Tony Holcombe, president/CEO of Syniverse, Tampa, FL. "With the current trends of smartphones, netbooks and the market entries of new players, we need to grow a robust messaging business.

"We will have the reach and capabilities to better serve operators," he said. "We will also be able to speed market messaging services."

Some rival SMS aggregators refused to comment on the VeriSign sale, pleading disagreement over a few statements in the press release announcement.

VeriSign's Inter-Carrier Gateway will now be part of Syniverse's Next Advanced Messaging Hub and will let operators deliver inter-carrier person-to-person SMS and MMS messages across geographies and technologies.

The company's PictureMail, which provides an MMS platform with core components that include a hosted MMS service center (MMSC) for MMS routing, handset photo applications, a social networking interface, and photo storage and sharing capabilities, will also be part of the Hub.

The Premium Messaging Gateway manages delivery of "off-portal" or third-party content to subscribers and will be part of the Next Hub.

VeriSign's Mobile Enterprise services enable businesses to send time- and event-based messages or alerts via voice, text message or email to customers, employees or partners. These services also let carriers offer their high-value customers a broader array of services, including enterprise and mobile financial services.

The Mobile Enterprise service will be a part of Syniverse's Next Hub as well.

Syniverse hopes that this deal will help grow its top-line revenue through new offerings that serve wireless carriers' and enterprise customers' growing need for messaging services, but will also achieve the scale and reach that is needed to compete globally.

As a result of the acquisition, Syniverse will increase its global operating footprint with the integration of approximately 300 additional employees located primarily in the United States and Asia Pacific.

Of those 300, more than 100 are based in India, where Syniverse has a significant strategic interest, providing data-clearing services to several carriers. It was recently awarded a contract to supply number-portability services.

Deutsche Bank and Alston & Bird LLP provided advisory services to Syniverse in connection with the transaction.

"Even under challenging economic conditions, we have continued to execute on our divestiture strategy through aligning with buyers with complementary strengths," said Mark McLaughlin, president/CEO of VeriSign. "We are pleased to continue making progress on our divestiture program with this latest agreement with Syniverse."