NeuStar Acquires Followap
NeuStar, Inc. (NYSE: NSR), a provider of essential communications services to the global communications and Internet industry, announced today that it has acquired Followap, Inc., a UK-based leading provider of mobile instant messaging (IM) products in Europe and Asia, for approximately $139 million in cash. NeuStar projects Followap revenue to exceed $25 million in 2007 and to more than double in 2008. NeuStar affirmed the 2006 full-year guidance issued on November 2, 2006, and confirmed that the acquisition of Followap did not impact its 2006 guidance.
Followap is a leading provider of next-generation communications solutions for network operators, delivering interoperability between operators and Internet portals in five different functional areas: instant messaging, presence, multimedia gateways, inter-carrier messaging hubs, and services for handset clients. Working with Europe’s leading mobile and fixed-line operators, Followap has a customer base of 17 mobile network operators (MNOs) that have over 160 million subscribers. Customers, such as Vodafone, Turkcell, 3 Group (Hutchison), Wind and Mobinil, all rely on Followap to provide them with innovative solutions to implement the operator-based, Personal IM service, as well as to provide mobile access to leading Internet IM portals.
Followap also works closely with leading Internet service providers (ISPs) and specializes in seamlessly connecting mobile subscribers to their favorite portal-based instant messaging applications, in addition to network operator-based services such as Personal IM. Followap’s advanced IM client solutions have recently been adopted by leading handset manufacturers. The GSM Association has identified Personal IM as a pan-industry, mobile operator-hosted, messaging service that is a critical complement and an upgrade to existing mobile messaging services, including text and multimedia messaging and telephone-number based presence. Personal IM will enhance services and capabilities for over 1.2 billion mobile messaging users globally—the largest, fully interoperable user community, short of voice telephony, which generates over $60 billion in revenues for mobile operators and sends over 1 trillion messages per year. As announced at the annual GSMA’s 3GSM World Congress 2006 in Barcelona, Personal IM is scheduled for a coordinated mobile industry launch starting in the first quarter of 2007 across major European and Asian markets.
Strategy Behind Acquisition
The Followap acquisition expands NeuStar’s platform for growth especially in mobile, IP and international markets. Followap furthers NeuStar’s strategy by extending and complementing our current beachhead initiatives in new growth markets such as the GSM Association root DNS service, the acquisition of UltraDNS and the development of the SIP-IX service.
First, Followap brings a large community of new customers outside of North America. Second, it makes NeuStar essential to a new, fast growing service for the wireless industry. And, third, it enables NeuStar to solve immediate infrastructure challenges the MNOs face in delivering advanced, IP-based services.
Followap will form the core of NeuStar’s Next Generation Messaging group and will complement NeuStar’s SIP-IX suite of interoperability product offerings and services. Combined with NeuStar’s technology depth, the Followap service and product suite will enable network operators worldwide to provide mobile instant messaging to their subscribers across networks and ISPs.
Commentary from Company Executives & Industry Observers
Jeff Ganek, NeuStar’s Chairman and Chief Executive Officer said, “Strong demand is emerging worldwide for Instant Messaging, and leading mobile network operators in Europe already depend on Followap’s products to deliver IM. Mobile network operators can rely on NeuStar and Followap for the necessary technical and service quality to support their growing IM volumes. By enabling IM, NeuStar will build on Followap’s strengths to deliver essential infrastructure services, in Europe and Asia.”
Dotan Volach, Followap’s Chief Executive Officer added, “We are pleased to join the NeuStar team. NeuStar’s next generation services, including SIP-IX, support and extend Followap’s products, and will enable the combined company to become the leading provider of infrastructure services essential to delivering IP data services over mobile networks.”
“NeuStar wrote a number of the key next-generation technology standards, such as the SIP protocol, as well as the ENUM-like directory standards for accessing phone number-based routing and mobile number portability data critical for IM interoperability,” said Mark Foster, NeuStar CTO. Foster continued, “Followap brings operator class-leading next-generation messaging products that, alongside NeuStar’s track record as a trusted provider of essential interoperability, directory, and managed services, position us collectively to support the full spectrum of industry needs for these vital services. The combination will offer messaging, presence, dynamic routing, and interworking services to network operators and internet portal providers around the globe.”
According to Pete Nuthall, Mobile & Wireless Industry Analyst of Frost & Sullivan Europe, “Mobile IM is the next major global messaging revenue opportunity, as it represents both the functional evolution of SMS and has an existing 1 billion plus global SMS user base into which it will grow. Followap is a world leader in mobile IM applications, presence, and inter-carrier messaging. NeuStar’s unique capabilities include deciphering and interpreting billions of connections initiated by thousands of service providers each day in a neutral and efficient manner. Combining the two is a significant win for the industry.”
NeuStar, Inc. will take live questions from securities analysts and institutional portfolio managers; the complete call is open to all other interested parties on a listen-only basis.
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