Sinch will acquire SAP Digital Interconnect for €225m

6 May 2020446 Views

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Swedish telecoms and cloud communications firm Sinch has announced plans to acquire SAP’s Digital Interconnect messaging business.

On Tuesday (5 May), Sinch announced that it has entered a definitive agreement to acquire SAP Digital Interconnect (SDI) in a deal worth €225m.

Stockholm-headquartered Sinch is a telecoms and cloud communications company that was founded in 2008. Sinch said that the acquisition of SDI will help the Swedish business to grow its global cloud communication capabilities.

SDI’s platform offers cloud-based communications products and serves more than 1,500 enterprise customers across the globe. Its customer base includes technology companies, banks, payment gateways, retail brands and mobile operators.

The acquisition

Sinch CEO Oscar Werner said: “Sinch and SAP both recognise the power of cloud technology to drive business transformation and deliver a superior customer experience. With SDI now becoming a part of Sinch, we build on our scale, focus and capabilities to truly redefine how businesses engage with their customers, throughout the world.”

Sinch said it has forged a strategy to grow its company through both organic and inorganic means, with a long-term focus on profitability and cashflow. It added that this makes the company “well placed” to continue in times when “overall macroeconomic conditions are unfavourable”.

Thomas Saueressig, member of SAP SE’s executive board responsible for product engineering, said: “SAP Digital Interconnect is a leader in its area showing profitable growth and reaching 99pc of the world’s mobile subscribers.

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“Looking at Sinch’s innovation and investment strategy in the area of cloud communication platforms, we welcome them as the new owner of SDI. Sinch is perfectly positioned to unleash further growth potential we see in SDI.”

Messaging services

SDI’s business consists of three segments, including an enterprise-targeted API-based offering for omnichannel customer engagement through SMS, push alerts, email, WhatsApp, WeChat and Viber. In 2019, SDI processed more than 18bn enterprise messages, which was a 17pc increase on 2018.

SDI also offers carrier messaging, including a range of business-critical services to mobile operators such as products for person-to-person messaging, reporting and analytics. In 2019, SDI processed more than 292bn carrier messages.

The third segment of the business is SDI’s enterprise solutions arm, which spans products for contact centres, including public cloud solutions and critical event management.

This is Sinch’s third acquisition announcement in recent weeks, with the Swedish company acquiring Latin American messaging provider Wavy for $119m in March and ChatLayer for $6m last month.

TechCrunch suggested that SAP is selling the legacy SDI unit as part of a bigger strategy to focus on its customer relationship management and newer enterprise services.

Kelly Earley is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com