Breaking Up The M&A Way

 |  Includes: FIS, MA
by: 451 Research: Inorganic Growth

By Ben Kolada

Though previously engaged in a joint venture (JV) called Monitise Americas, mobile banking startup Monitise and Fidelity National Information Services (NYSE:FIS) have been growing apart. Through a series of moves, the two companies, though still partners, seem to be getting ever closer to completely severing their relationship.

The eventual breakup appears to be spearheaded by Monitise. For just over three years, Monitise and FIS owned a JV named Monitise Americas. However, in November 2011, Monitise brought the JV completely under its own control, perhaps as a prelude to its next major M&A play.

Following the severing of that venture, FIS threw its weight behind Monitise competitor mFoundry, participating alongside MasterCard (NYSE:MA) and existing investors in an $18 million round of financing for mFoundry that was disclosed in December 2011. Not only was FIS's involvement here a competitive slap in the face, but the inclusion of MasterCard in the round put another nail in the coffin, as MasterCard rival Visa (NYSE:V) and its affiliates have been longtime investors in Monitise.

In response, just three months later Monitise announced its $173 million all-stock acquisition of North American counterpart Clairmail. Clairmail was a direct competitor to mFoundry, similar in both headcount and product portfolio.

With tension mounting, FIS recently announced that it is acquiring the remainder of mFoundry that it doesn't already own for $120 million in cash. If the relationship between FIS and Monitise continues, it certainly won't be as amicable as before. Although Monitise still called FIS a partner in its most recent annual report (released in September 2012), the feeling may no longer be mutual.

Date Event
November 2011 Monitise buys out the remainder of Monitise Americas that it didn’t already own from FIS.
December 2011 FIS invests alongside MasterCard in Monitise competitor mFoundry.
March 2012 Monitise acquires mFoundry rival Clairmail for $173m.
January 2013 FIS acquires the remainder of Monitise/Clairmail competitor mFoundry that it didn’t already own for $120m.
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Source: The 451 M&A KnowledgeBase.