IMI Mobile Buying Digital Music Distributor DX3 For Euro Expansion
Hyderabad-based mobile-content distributor IMI Mobile is buying digital music distributor DX3 of London as a beachhead into European and non-mobile markets. The UK company distributes music to white-label platforms like that of UK broadcaster ITV (LSE: ITV) and handled mobile download marketing for EMI’s pop band Alphabeat, but wants to branch out in to other content areas. IMI’s delivery platform distributes to a range of tier-one networks, but is still limited to just mobile.
“It’s very difficult for pure digital music providers to make money in the space,” DX3 CEO Anu Shah told mocoNews.net. “DX3 has a lot of content relationships and online experience as well, we have been dual-play for many years now. As for us, IMI has a very strong technology platform, many cost-efficient data centers around the world, support and the product range that will enable DX3 to go from being just a digital music provider to connect with social network tools, mobile marketing tools, UGC tools…”
DX3 will be renamed “IMI” by January, will retain and grow its 15 staff in London and will also open a Zurich office to serve pan-European clients from mainland Europe, Shah said. And more acquisitions are on the way: “It’s not the end of IMI Europe’s aggressive expansion plans - we are actively looking at other organic and inorganic acquisitions in the next six months.
Shah said Europe is the “cutting edge of the market” and, accordingly, IMI will use DX3 for some product development. Migration of DX3’s technical services to IMI is underway, the new IMI Europe will be unveiling new services in Q1 and Q2 next year and it’s also hoping to power music services for ISPs Shah said it is talking with.
Posted In: Entertainment, Music, Mobile
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Comments (4)
Nov 14, 2008 12:53 PM
Source : Spark Annual Report
at the Balance Sheet date, the net equity of each of DX3 is negative when the debt owed to SPARK is included. As there are no agreements in place for the minority shareholders to contribute their share of the losses for the year, the accounts presented do not give the minority interests their proportionate share of the losses made in the year but instead show 100% of the losses as
being due to SPARK’s shareholders.
Wonder how a negative networth company is acquired for USD 10 mil unless the deal is mostly share swaps and little cash
Nov 17, 2008 3:07 AM
@ amit
IMImobile is also venture financed by Spark… And it is not uncommon for the VC to have its say in the M&A decisions, especially if it owns a 38% stake in the acquiring company and a big chunk (75% in case of DX3) in the target company.. So your guess is as good as mine. :)
And this should explain how a $12m (topline) company acquires a loss making company in a $10m deal. It could be all paper and no cash.
Nov 17, 2008 3:15 PM
:D guess what, if one buys out spark (current valuations at 22.5 mil GBP), they get net current assets (cash and equivalent) of GBP 14.5 mil along with 38%+ stake in IMI.
This implies about USD 30-35 mil valuation for IMI, which is not too bad at less than 3X revenue multiple
Apr 4, 2009 9:35 AM
When everybody is looking at Asia. why you have to think about europe.Rest of all big corporate names are looking for expansion in the subcontinent.European markets are down and out.