VeriSign acquired mobile content technology developer m-Qube on Monday for $250 million net of cash, in the latest of a string of acquisitions by the online payment security provider to boost its wireless and broadband technology capabilities.
In February VeriSign purchased another wireless technology company, 3united, a wireless applications service provider. It also bought Snapcentric for $12 million to build a service for guarding against identity theft (see VeriSign Buys Snapcentric).
Earlier this month, the Mountain View, California-based company acquired Kontiki, which makes peer-to-peer technology for delivering multimedia content on demand (see VeriSign Buys Kontiki: $62M).
The latest purchase gives VeriSign a company that has provided technology mobile storefronts and mobile marketing campaigns for a variety of well-known companies and brands, especially in the media and telecommunications industries.
“While VeriSign’s initial approach to mobile content was more weighted to being a content aggregator and a consumer-facing brand, the company is clearly repositioning this business toward being more of an infrastructure provider,” wrote Stiffel Nicholas analyst Todd C. Weller in a research note.
Shares of VeriSign rose $0.37 to $23.59 in recent trading.
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Watertown, Massachusetts-based m-Qube has worked with Sony Pictures, CBS, Major League Baseball Advanced Media, Warner Music Group, Reuters, GQ, Virgin Mobile Canada, and Telus Mobility.
The company has over 150 customers and distributes to more than 200 million subscribers in North America through carriers such as Verizon Wireless.
“This is a major positive as the acquisition gives VeriSign a lead at this point in providing mobile content infrastructure in North America,” wrote JP Morgan Securities analyst Sterling Auty in a research note. He believes the acquisition will give VeriSign a leading position with VeriSign Wireless.
m-Qube provided the technology for the CBS Alerts service that CBS announced last month, which delivered news alerts from CBS News and Entertainment Tonight to customers’ mobile phones (see CBS Offers Cell Phone News).
The company also signed a deal with Condé Nast’s GQ magazine last month to provide content to GQ readers’ mobile phones about VIP events, shopping nights, private sales, and grooming information.
VeriSign sees an opportunity for providing this type of content for mobile phones by acquiring m-Qube and its 200 employees.
“m-Qube will increase our leadership and expand our services in this emerging category,” said Vernon Irvin, executive vice president and general manager of VeriSign Communications Services.
VeriSign expects the transaction to be neutral to earnings for the rest of 2006. JP Morgan estimates that m-Qube had roughly $80 million in revenue last year. The deal is expected to close in the second quarter.
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