Sinch Strengthens SaaS Offering with myElefant Acquisition

Oct 01, 2019

Sinch AB (publ), a provider of cloud communications for mobile customer engagement, has entered into a definitive agreement to acquire myElefant SAS for an upfront cash consideration of EUR 18.5 million with an additional cash earnout of up to EUR 3 million within two years if certain gross profit targets are met.

Founded in Paris in 2010, myElefant has built a cloud-based software platform for mobile engagement using rich, interactive messaging. Its low-code design tools let businesses create immersive media experiences with minimal coding or development resources. The company has pioneered the use of mobile landing pages and is an early adopter of conversational messaging technologies like RCS, Facebook Messenger, and WhatsApp.

The myElefant SaaS (Software-as-a-Service) platform is currently used by more than 160 enterprise customers. Advanced mobile landing pages, that are unique to each recipient, let businesses combine the unrivaled, 100 percent reach of SMS with the rich media capabilities, interactivity, and analytics that a web page can offer. Customers include leading brands such as Orange, Nespresso, and Nissan. In 2018, myElefant generated revenues of EUR 10.5 million, Gross Profit of EUR 3.1 million, and EBITDA of EUR 0.8 million. Year-on-year revenue growth was 25 percent. The myElefant team consists of 41 persons in Paris and Bordeaux.

The transaction is expected to close in early October 2019 and will be financed using Sinch’s available credit facilities. Handelsbanken Capital Markets is serving as a financial advisor to Sinch for the acquisition.

Sinch has a financial target to maintain net debt/adjusted EBITDA below 2.5x over time. As of Q2 2019, net debt/adjusted EBITDA was 1.0x when measured on a rolling, twelve-month basis. The acquisition of myElefant increases Sinch net debt/adjusted EBITDA by around 0.4x, which implies that Sinch pro forma net debt/adjusted EBITDA rises to around 1.4x following the acquisition.

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