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Kaleyra To Acquire Mobile Messaging Provider mGage For $215M, Raises $200M From Notes And $125M Via Equity

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  • Kaleyra, Inc. (NYSE: KLRinked an agreement to acquire mobile messaging provider mGage for $215 million in cash and Kaleyra shares. mGage will receive $195 million in cash and the remaining in 1.6 million shares of Kaleyra common stock.
  • mGage’s cloud-based enterprise mobile messaging platform includes Communicate Pro, their API solution Connect, and Omnichannel mobile messaging offerings like SMS, MMS, and RCS.
  • Communicate Pro is mGage’s cloud-based, enterprise-level messaging platform for connecting brands with their customers via major mobile messaging channels. mGage’s enterprise-grade APIs enables clients to build on existing messaging programs seamlessly. mGage is one of only four mobile messaging providers with direct connections to all major U.S. carriers, with unique network performance and cost advantages.
  • mGage’s has produced over 20% revenue growth, over 30% gross margin, high-teens EBITDA margin, and compelling free cash flow.
  • In 2021, Kaleyra and mGage will process over 50 billion global transactions, with 31% of revenue coming from North America, over 30% coming from Europe, and the remainder from APAC and Latin America on a proforma basis.
  • “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,” said Kaleyra CEO Dario Calogero.
  • Kaleyra borrowed $200 million in senior unsecured convertible notes due 2026 and sold 8.4 million shares in a PIPE (private investment in public equity) offering for a total share issuance of 10 million shares at $125 million to fund the acquisition.
  • Price action: KLR shares are down 2.64% at $16.24 on the last check Friday.
 

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