Verisign Sells mQube To Mobile Messenger For Measly $19 Million

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Verisign Sells mQube To Mobile Messenger For Measly $19 Million

Verisign is selling off its last remaining non-core mobile business, mQube, to mobile messaging company Mobile Messenger, for an undisclosed sum. MM obtains m-Qube’s direct connections to carriers in the US and Canada, and its entire business of delivering commercial messaging and premium mobile content. Verisign acquired mQube for $250 million more than three years ago, though the sale price is likely only a fraction of that. MM was started in Australia, and entered U.S. in 2004; it was m-Qube’s largest client.

Mobile Messenger, which is majority owned by PE firm Silver Lake Sumeru, remains headquartered in Los Angeles. m-Qube’s Boston office has been integrated into MM as a business unit, and will serve as the company’s global tech headquarters. Newly appointed CTO Purandar Das will lead the integration and MM’s technology operations from Boston. More details in release.

Updated: The price was disclosed in an SEC filing by Verisign: $1.78 million cash, and it will also receive an amount equal to m-Qube’s working capital as of the closing date, which is about $17.5 million. Thus a total of about $19.3 million, which as I mentioned above is a small fraction of the $250 million plus it was bought for.

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Rafat Ali

@rafatali Nov 16, 2009 1:36 PM ET

Posted In: Money, M&A & Venture Capital, Mergers & Acquisitions, Companies, VeriSign, mobile messenger, mqube

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EFR

Any sense for revenues of the m-cube business at this point? When it was purchased by Verisign it was something on the order of $62.5mm as I recall.

Eric

Rafat, It seems like you love to editorialize in your headlines. Why not simply report the news and/or explain why the company was sold at the low price. The tone of your articles is often one of schadenfreude - are you really so jaded at this point? I would love to see more facts and objective journalistic standards. And no, I do not work for m-Qube.

Alex

Actually, after reading the fine print in the 8-K, it seems to me, that 17.5 million for m-qube's working capital is just paying cash for non-liquid current assets (such as accounts receivables that have not yet been settled). 786K was paid to VRSN to cover severance packages paid to former employees. So in the end, MM is paying a 1 million dollar premium for the business.

Rafat Ali

Hey al
yes, thanks for pointing that out. corrected.

Al

"and MM will also receive an amount equal to m-Qube’s working capital as of the closing date"

do you mean

"and Verisign will also receive an amount equal to m-Qube’s working capital as of the closing date"

Rafat Ali

Verisign is indemnifying MM until the deal closes, and from the sound of it, after too, at least for prior business. From SEC filing: "The Company will indemnify the Purchaser for, among other things, certain liabilities associated with the MDG business that have arisen or may arise from the conduct of the MDG business prior to the closing date. The Company generally will be responsible for existing liabilities associated with the MDG business. "