Cyan buys I-New — a match made in heaven
Stock market listed cyan AG (CYR:GY) goes on a shopping spree and acquires I-New Unified Mobile Solutions AG to create a fully integrated technology provider for telecommunication companies with massive growth potential.
The main business areas of cyan are mobile security solutions for the end customers of mobile network operators (MNOs) and fixed line internet service providers (MNO, ISP), of mobile virtual network operators (MVNO), the insurance and financial services sector and government institutions. The company’s solutions can easily be integrated into the existing infrastructure of its B2B business partners, who profit from a revenue share model.
Win-Win-Win
The big incentive for the B2B partner: Without own capex he can offer his customers first-class security solutions and at the same time — because he participates in the earnings — generates additional revenue streams for himself. Especially in times of shrinking margins in the core business, additional services are one of THE growth areas for telcos and banks. Cyan again has no customer acquisition costs because it sits on an existing customer base. And the end customer also benefits because he/she receives — through the direct integration into his/her existing contractual relationship or app -attractively priced, high-quality security solutions for his/her mobile device.
I-New: White Label solutions for MVNOs
I-New, in turn, is the leading provider of technology and service solutions for those mobile virtual network operators (MVNOs) mentioned at the outset, i.e. mobile service providers that do not have their own network but purchase network capacities from the major mobile communications companies and sell them to consumers under their own brand name. I-New provides these MVNOs with the complete technology platform and runs the entire business as a so-called “white label outsourcing partner”. The I-New customer just needs to provide his brand name and take care of customer acquisition. This way, companies with a large retail customer base can offer their customers mobile phone services without having to invest heavily in technology themselves.
I-New, an Austrian company employing around 120 people, has 11 locations on 5 continents with 40 such MVNOs as clients, which serve around 5.5 million retail customers.
Match made in heaven
The merger is a perfect combination: cyan can immediately offer its security solutions to all 40 existing I-New partners, virtually pre-installed, which should considerably speed up the cyan rollout. In addition, I-New has a global sales force that cyan has been lacking so far, and both companies have a full pipeline, which can now be executed together.
Strong increase in sales and profits
In the announcement of the acquisition cyan already expects massive positive effects on sales and profit: In 2018 20 million euros and in 2019 then already at least 35 million euros shall be achieved in sales. This result will lead to profits before tax of at least 7 million euros in 2018 and at least 20 million euros in 2019. CFO Michael Sieghart emphasized that these budget figures only contain marginal synergies between the two companies and especially the profit could be significantly higher.
German flagship investor on board
Cyan is backed by Christian Angermayer, one of Europe’s most successful tech-investors. His Apeiron Investment Group holds close to 20% in cyan. Thanks in part to cyan’s highly successful IPO this year he was able to position himself in the Sunday Times annual rich list with a personal wealth of approx. 300 million euros. His global network and entrepreneurial talent should be a guarantee that cyan will maintain its growth rate in the upcoming years.
