Sinch Shells Out $1.3B to Buy Business SMS Services Company MessageMedia

According to a news release published on Wednesday, the self-described global leader in cloud communications for mobile customer engagement, has agreed to purchase MessageMedia, a mobile messaging solutions company serving clients in the United States, Australia, New Zealand, and Europe. The deal, set to close in the second quarter of 2021, will be paid for with a combination of cash and to a lesser degree, Sinch AB shares.

The press release explained that Sinch is a publicly traded Swedish company that utilizes its cloud communications platform to let businesses reach mobile phones worldwide through mobile messaging, voice, and video. According to the same source, MessageMedia “offers a web-based software-as-a-service (SaaS) suite that makes it easy to leverage two-way messaging without any need for coding or familiarity with API:s. It operates a highly automated and scalable tech platform that is purposefully tailored to meet the specific needs of small and medium-sized businesses.” The SaaS company reportedly serves over 60,000 customers and transmits more than 5 billion mobile messages per year.

“Addressing small and medium-sized businesses opens up a new avenue to growth and dramatically expands our addressable market. With MessageMedia as a part of Sinch, we will have the best team in the industry to capitalize on that opportunity,” said Sinch CEO Oscar Werner in a statement.

According to TechCrunch, the move is intended to buoy Sinch’s chances of competing with Twilio, another cloud communications platform as a service company. Wednesday’s article written by Ingrid Lunden remarked that the deal is doubly noteworthy for giving Sinch a leg-up in the business SMS world and because of its timing.

Sinch’s announcement comes shortly after Twilio acquired Zipwhip, “another big player in the same area of business SMS” for $850 million, TechCrunch reported. Too, Lunden wrote, Sinch has rapidly been purchasing companies to scale up its business during the pandemic-driven uptick in internet and phone communication. By utilizing economies of scale in the communications industry, the article noted, Sinch has in essence created a “business built on aggregating incremental revenues.”

Before consummating the deal, Sinch stated in its news release, the proposal will be vetted by the Australian Foreign Investment Review Board, the Australian Competition and Consumer Commission, and U.S. competition authorities.