Buongiorno spins out B2B business

Buongiorno and Francisco Partners agree to spin out the majority of its B2B business into a newly established company, creating a new mobile marketing, loyalty, and advertising leader in a deal valued at 110 million euros.

Buongiorno announced today a binding agreement with Francisco Partners to carve out the large majority of its B2B assets, namely those covering an end-to-end service proposition in mobile marketing, loyalty, advertising, messaging and applications.

The New Company, which will be independently managed, will be majority controlled by Francisco Partners with Boungiorno retaining at 40% stake and will leverage on the extensive technological and managerial experience, multi-geographical approach, and strong operator relationships of Buongiorno, as well as on the proven track record of Francisco Partners of successful development-oriented investments in the technology software and global services industry.

The New Company will have approximately 500 employees, over 50 million euros of revenue.   As part of this transaction New Company will have an established international presence with operations in Europe, the Americas, India, Australia, and Asia and its headquarters in London.

With this move, Buongiorno will pursue a more differentiated and focused development of the B2C and B2B business lines. The B2C business, which recently strengthened its global leadership thanks to the Dada.net acquisition, will remain the core focus of Buongiorno, while the goal of the new entity will be to be the top global player in B2B space. Buongiorno, however, will retain certain content-driven B2B businesses which have a business model similar to its B2C business.

“In its first 11 years, Buongiorno has built a strong positioning in both the B2C and the B2B spaces of the mobile internet industry” commented Mauro Del Rio, founder and Chairman of Buongiorno. “In a vibrant, fast changing, industry, new significant opportunities are now unfolding in front of us. We recognized it was time to take a more focused approach to take advantage of their differences. We are really excited to partner with Francisco Partners in doing so. As a world class, technology oriented, investor they will bring know-how and discipline to accelerate our growth in the mobile marketing and CRM space. And we are pleased to take this step in full agreement with our long term partner Mitsui”.

”Francisco Partners has been impressed by the New Company’s track record of strong growth, product innovation and customer satisfaction” commented Matt Spetzler, Principal at Francisco Partners. ”We are excited to partner with Buongiorno and the New Company’s management team to capitalize on its successful track record to date and to invest behind them to become the leader in the mobile marketing, loyalty/CRM and advertising markets”

“We took a first step in the direction of specializing our B2C and B2B approach at the beginning of 2010, when we moved to a divisional organization” said Andrea Casalini, CEO of Buongiorno. “Today we take a further, bolder step: creating and managing the two separate entities will align the organizations more effectively to achieve the ambitious growth objectives each has been set. It will also give the best professional opportunity in both areas of our management team and staff. Moreover the deal with a leading technology investor like Francisco Partners, at multiples which are materially higher than those currently on the Milan Stock Exchange, is also a first step in unlocking the value which Buongiorno has created during the years for its shareholders.”

The transaction is expected to close within 90 days following (i) completion of various pre-closing corporate and contractual steps and (ii) the finalization of a separation plan aimed at enabling the New Company to operate on a stand alone basis while ensuring business continuity.

Bonelli Erede Pappalardo is acting as legal counsel to Buongiorno in the transaction.  Kirkland & Ellis along with Chiomenti Studio Legale are acting as legal counsel to Francisco Partners in the transaction.

Additional information concerning developments of the operation will be provided in the documentation to be submitted to Borsa Italiana, CONSOB, and the Shareholders, in accordance with applicable regulatory requirements.