Boku (LON:BOKU) has accelerated its move into products adjacent to its carrier billing services – it had already started developing mobile identity verification services, and the acquisition of US-based Danal will add a fully formed business in this field and bring a new set of customers. Boku is paying mainly share-based initial consideration of $37.2m, with up to a further $64m payable in equity if ambitious revenue targets for FY19 are achieved. While initially dilutive, the deal broadens the company’s product portfolio and expands the types of merchants it can serve, supporting Boku’s growth prospects in the medium- to long-term.
Buying a US-based mobile ID verification business
Danal sells mobile ID verification services to a mainly US customer base, using its connections to North American mobile carriers. Danal’s carrier connections could boost Boku’s direct carrier billing business, which has not been particularly strong in the US. Boku can also bring to Danal its many carrier connections in Europe, the Middle East and Asia, to help it to globalise its offering. Boku will be able to broaden its merchant base from purely digital content to a range of different verticals.
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