The Silicon Beach tech scene saw another huge exit last week with TeleSign Corp. agreeing to be acquired by Belgacom International Carrier Services, known as Bics, for $230 million in cash.
TeleSign will remain a standalone entity as part of the deal, with co-founder and Chief Executive Aled Miles remaining in his leadership post, according to the companies, while Bics Chief Executive Daniel Kurgan will act as chairman.
TeleSign Chief Financial Officer Matt Hardy said the deal was an important step for both sides and only happened after an extended back-and-forth about their respective futures.
“It’s a big deal for them and, obviously, it’s a momentous achievement for us, so we both did a tremendous amount of due diligence,” Hardy said. “But the synergy is really there. They have a very strong presence in Europe and a set of backend capabilities that we couldn’t find anywhere else, and we’re very strong here in the U.S. and on the tech side.”
He said the relationship with Bics, a provider of mobile data services, stretched back to 2014, when TeleSign began using the company for backend support of its software service products. The Marina del Rey company helps businesses facilitate online account registration and implement security features such as two-factor authentication. While Bics was initially a small vendor for TeleSign, the account quickly grew into its largest expenditure as TeleSign grew.
As TeleSign’s platform took off – it now provides security and other solutions for 20 of the 25 most-visited web properties – the company was bombarded with acquisition offers, Hardy said. But none was taken seriously until Miles and Kurgan began talking through a potential Bics bid over dinner in the fall. TeleSign quickly engaged William Blair & Co. as its financial adviser and Gibson Dunn & Crutcher for legal representation; some six months later the deal was inked. It is expected to close in the third quarter, barring regulatory delays.
The companies said the combined entity would attempt to corner a chunk of the messaging and data communication market, pointing to a report by IDC Research Inc. that forecasts a worldwide market valued at $8.2 billion by 2021, compared with $867 million last year.
Ryan Disraeli, Miles’ co-founder and a vice president at TeleSign, said the exit was a huge validation for both the company and the L.A. tech scene.
“We started in Santa Monica in 2005 and have a really strong heritage in Los Angeles,” Disraeli said. “This deal is validation of the tech and enterprise software companies here, and we’re really excited about the opportunity to have a company with $1.6 billion in revenue backing us.”
