MBlox is rumored to be looking to expand both its global footprint and its business plan with a $175 million acquisition of content provider LaNetro Zed.
The Sunnyvale, Calif.-based mobile data and billing services provider declined to discuss the buyout, but industry sources say mBlox is expected to announce the deal later this month. LaNetro Zed, which sells content and applications directly to consumers, reported a net profit of $16.4 million last year on $172 million in revenue.
The development marks a bold step for mBlox, which has received little publicity despite gaining significant traction delivering content and providing billing services. While companies such as Qpass Inc. and m-Qube Inc. have drawn attention by powering wireless storefronts and developing mobile marketing campaigns, mBlox has quietly provided the infrastructure to do the heavy lifting for text-message advertising campaigns and off-deck content sales.
“We do two things: We move data from A to B, and we bill for it,” Jay Emmet, mBlox’s president of the Americas, said last month before the acquisition had been disclosed to RCR Wireless News. “I am a pure-play aggregator in that all I do is the telecom (side).”
The acquisition will provide ample opportunity for mBlox to experience the marketing side of wireless, however. LaNetro Zed sells wireless videos, ringtones, Java games and other content through more than 50 operators in 15 countries. The Madrid, Spain-based content provider has solid distribution in Europe and China and last year opened offices in the United States and South Africa.
Roughly 85 percent of LaNetro Zed’s content is based on its own intellectual property, according to the company.
MBlox’s move into the mobile storefront business follows several high-profile acquisitions in the space. Amdocs Ltd. recently shelled out $275 million to purchase Qpass; earlier this year, VeriSign Inc. agreed to pay $250 million to acquire m-Qube. A smaller player, Seattle’s Wireless Services Corp., announced the acquisition of Mobile Media North America several weeks ago.
Mblox had been expected to move into Asia, but most onlookers believed the company was targeting one of several smaller players for acquisition. The company recently closed a $25 million financing round, and has raised more than $50 million in the past three years-successful efforts, to be sure, but far short of LaNetro’s asking price.
Given the size of its investment, mBlox will be expected to pass a crash course in marketing mobile content.
“It almost seems like the canary ate the cat instead of the other way around,” according to Tony Rizzo, director of mobile technology research for The 451 Group, a New York-based IT research firm. “The question now is whether or not mBlox can pull off evolving into something more than a pure infrastructure player. That remains to be seen.”
