Mobile Music Firm Groove Mobile Sells NMS For $14.5 Million
This wasn’t what I was expecting, but Groove Mobile, the mobile music player, has finally been bought: LiveWire Mobile, a subsidiary of NMS Communications has bought the Bedford, MA based firm for $14.5 million, which seems low. In December 2007, NMS announced the creation of LiveWire Mobile as a separate division delivering mobile personalization services to operators, and Groove fits in well there. LiveWire Mobile will hire most of the Groove’s employees and the two companies will consolidate office locations.
Groove Mobile has 12 mobile operator customers including Sprint (NYSE: S), 3 UK and Bell Mobility as well as relationships with music labels including EMI, Sony (NYSE: SNE) BMG, Universal Music Group and Warner Music Group (NYSE: WMG). It generated over $7.5 million in revenue during 2007, and it currently expect LiveWire Mobile to exit 2008 with a revenue run rate in excess of $30 million. Also, NMS expects to take a restructuring charge of approximately $400,000 to $600,000 in Q108 in connection with the Groove acquisition.
More in the release here.
Posted In: Entertainment, Music, Money, M&A & Venture Capital, Mergers & Acquisitions, groove mobile, nms communications
Newsletter
Comments (4)
Mar 18, 2008 10:02 AM
You didn’t see it coming because you’re always one of the last to know, Rafat.
Get off your high-horse.
We actually made a bid higher than this sale but the stupid-ass bankers (yet again) always seem to f**k things up. F**k ‘em.
Mar 18, 2008 2:17 PM
I think the above it is an unfair comment for Rafat and the Moconews team. They usually get things as soon as they are public (and sometimes sooner) but it is obviously hard for them to know what happens behind the scenes all the time in all companies.
That said, the case of the ‘low’ valuation of Groove is very simple. Just as the Motricity case, you have to look at the MARGINS. Yes, they may have ‘generated’ $7.5M in revenue but, how much do they actually keep? From there you have to assume that such percentage (if any) is flat (growth tied to volume) and the model is likely to move to a fixed monthly fee (no growth). As I have said before, if there is something you can always count on the carriers for is on their squeezing other people’s margins and never looking back.
If people don’t know this by now, they know nothing about mobile.
MR
Mar 18, 2008 4:30 PM
Seems the VC’s just wanted “Out” of the investment or Groove could not raise any more money and were forced to sell. Groove raised 32 million and sold for 14.5 million. Very good buy for NMS.
Mar 18, 2008 6:42 PM
couldn’t agree more with “someone else”...so, who’s next? Omnifone? Didiom?