Velti Deal: MIG Speaks

DM: So how did this deal come about Barry?

BH: It’s a case of two like-minded businesses coming together. We’ve been working on this for the last six months. We are very similar culturally, commercially and technically, and we have known each other for many years. Velti has an ambitious management team, a massive infrastructure out of Greece, and also a fair-sized operation in the US, and sales offices around the world. But they needed a strong UK presence to put down a marker for their global ambitions. The deal means that we add 165 people to their 40 in the UK, so overnight, we become the biggest mobile marketing business in the UK.

DM: But your mobile advertising business, 4th Screen, is not included in the deal?

BH: That’s right. 4th Screen is a premium mobile advertising network. Velti already has Mobclix, which is an exchange model, and we didn’t really see how 4th Screen would fit into the Velti set up. So Mark Slade and his 20-strong team will continue to run that business.

DM: And what’s the background to the deal?

BH: We felt there were two ways we could go. One was to lead the consolidation as we have been doing with our own acquisitions of Piri, Golden Bytes and ZayPay. We have a high cash-generative core business model and we have created our own capital for growth, and those acquisitions have helped us to launch into the US, Benelux and Australia, but we needed to accelerate more quickly, we knew the Velti team very well, and they offered us a growth model, in which all our people stay in the business, and in addition, we recruit more people. There’s also a good fit between the two companies in terms of the things we can offer that they don’t currently do, such as payments and social interactivity with our work with Facebook.

On the client side, Velti are very strong in the operator space. They have relationships with half of the global carriers, which is hugely attractive for us from a payments perspective. Then you look at our strength in the media space, and our relationships with the likes of ITV in the UK Channel 10 in Australia, and RTL in Holland, and you see there is a good fit. 

DM: So what happens to the MIG brand now, does it just gradually fade away?

BH: Not at all, half of the deal is performance-related, so we will be trading very hard for the next 12 months, and the MIG brand will live on for as long as we feel it’s appropriate. We don’t want to confuse customers; it’s all about continuity, not disruption.

DM: And what’s your role in the new set-up?

BH: I will run the UK operation along with Mike (Walsh), and in consultation with the wider board. We want to let both sets of customers know about our complementary offerings, which we’ll do through a series of customer workshops over the next couple of months. We’re going to offer something different. It won’t be a case of providing a mobile solution to meet a given brief. We will help brands go mobile, and be very successful in mobile, by applying techniques and business models that enable them to drive users to their mobile platforms, to monetise them when they get there, and to create value for them.

Barry Houlihan is CEO of Mobile Interactive Group (MIG)