Carrier billing company Boku is set to expand its expertise with a new acquisition this week. The San Francisco-based company agreed to acquire mobile identification and authentication company Danal for up to $68 million. The acquisition is expected to close December 31, 2018.
The deal is being structured as a reverse triangular merger to ensure Boku acquires 100% of Danal, a subsidiary of DFS Services. To finance the acquisition, Boku is issuing 26.7 million common shares for $0.0001 each, $3 million in Boku warrants, and $1 million in cash. In addition, Boku will pay deferred consideration of up to $64 million, the exact amount dependent on Danal’s future performance.
Leveraging its connections to MNOs, Danal offers data matching, account baselining, phone identification, and proactive monitoring to verify users’ identities for verticals including banks, healthcare, hospitality, and ecommerce. The San Jose-based company also offers solutions to satisfy Know Your Customer (KYC) and Telephone Consumer Protection Act (TCPA) regulations. Some of Danal’s customers include Western Union, BNP Paribas, PayPal, Square, Moneygram, Login.gov, and USAA. The privately-held company has raised $14.5 million.
Boku will leverage Danal’s technology to offer mobile identity services to its existing customers and to provide global coverage to Danal’s U.S. customers. “Combining Danal’s customer base and technology with Boku’s international scale and global MNO connection capability, will allow us to build the world leader in this emerging space,” said Boku CEO Jon Prideaux. “This acquisition allows us to offer services that go further and to improve user quality for our customers while at the same time improving the mobile experience for users… Danal has shown that MNO data can also combat fraud, reduce friction in signup and ensure regulatory compliance on mobile.”
Boku was founded in 2008 and provides payments technology that allows consumers to charge purchases to their mobile phone bill. The company offers its operator network for acquiring, activating, and monetizing customers through their mobile phones. The Boku platform is used in large digital marketplaces such as the Google Play store, Apple’s App store, Spotify, and Facebook’s App Center.
At FinovateEurope 2011 Boku showcased its mobile payment service. Earlier this fall, Boku was awarded Best Newcomer at the AIM Awards. Boku is publicly traded on the London stock exchange with a current market capitalization of $124 million.