UK based Globo Acquires Sourcebits Inc., Bangalore based mobile application development Specialist
UK based International enterprise mobility management provider Globo has acquired Sourcebits Inc, Bangalore based mobile applications and enterprise products company.
This acquisition from Globo is in line with its mission to have a global presence in the enterprise mobility market. This move will also accelerate its progress as a Mobile application development platform provider (“MADP”).
Post acquisition, Sourcebits will become part of Globo’s Mobility Business Services division (‘MBS’) providing substantial resources that will allow Globo to expand its offerings faster and to a broader marketplace, particularly the United States.
This acquisition will provide Globo with more powerful and compelling assets to compete for new clients and develop custom mobile applications with its flagship GO!Enterprise platform.
Currently, the services division of Sourcebits is based in San Francisco, California, with a significant development centre in Bangalore, India.
Sourcebits has an established client base including Intel, SAP, P&G, The Coca-Cola Co., Bank of America, Columbia University and Hershey’s.
Interestingly, there is minimal overlap between the two companies’ client bases.
Globo expects that the acquisition of Sourcebits will be earnings accretive in the first year as the Company has secured a significant pipeline of new contracts, providing strong visibility for 2014.
The consideration, which is not disclosed as a selling condition, is paid in cash and the transaction is structured on a debt free and cash free basis.
Speaking about the deal, Barry Ariko, Chairman of Globo,
The acquisition of Sourcebits is another significant step for Globo as we address the massive opportunity of the Mobile Application Development Platform market for enterprise customers. The quality of skills, clients and strong branding that Sourcebits adds to Globo will allow us to compete for more and larger Mobile Application Development projects and take advantage of our GO!Enterprise/ GO!AppZone MADP offering. Adding 167 Sourcebits’ employees in San Francisco and Bangalore further strengthens our U.S. presence and establishes our presence in India. We believe a global footprint can offer Globo a significant advantage in human resources, skillset and cost base. Having delivered strong results for 2013, and with current trading strong and organic growth underpinning our expansion, we are confident and excited about our future success.
Earlier, Sequoia Capital along with IDG Ventures India have invested close to $10 million in Sourcebits. The company has 167 employees and consultants, and in the year to March 2014 generated (unaudited) turnover of $8.2 million and EBITDA (under IFRS) of $1.8 million.
The purpose of the acquisition is to access and utilize the extensive developer resources, customer relationships and brand name of Sourcebits, in order to augment the resources Globo brings to its rapidly growing MBS corporate client base.
Post acquisition, Sourcebits will continue to operate under its own brand and under the control of Globo’s MBS division.
Following the transaction, assets of US$1.57 million and liabilities of US$0.97 million, including US$0.347 million of deferred revenues, and approximately 167 employees of Sourcebits will transfer to Globo.
Post-acquisition key members of Sourcebits’ management and development team will retain their positions within the new integrated structure.