Visa Europe, a license holder of Monitise’s mobile money technology, has made a strategic investment in Monitise, investing £24.7 million at an issue price of 35p per share for 70.5 million new Monitise shares.
Monitise has an existing global alliance agreement with Visa Inc, which is an independent and separate company to Visa Europe. Today’s announcement results in both companies now having strategic investments in Monitise. Visa Europe CEO Peter Ayliffe will also join Monitise’s board.
In February 2011, Monitise entered into a partnership agreement with Visa Europe to develop and supply mobile payments services for Visa Europe’s more than 4,000 member banks and financial institutions across 36 European countries. That partnership gives Visa Europe a licence to Monitise’s world-leading mobile technology.
Monitise added that it will also acquire the 51% stake in its US joint venture, Montitise Americas, from Metavante Corporation. Metavante (a subsidiary of FIS) will be paid for its stake in Monitise Americas with a 3.3% stake in Monitise shares.
Following the Visa Europe subscription and the issue of shares to FIS, Visa Europe’s and FIS’s respective shareholdings in Monitise will be 8.8% and 3.3%. Both transactions are based on an issue price of 35p.
Monitise Group Chief Executive Alastair Lukies said, “Visa Europe’s investment in Monitise, coupled with a deepening relationship eight months after our two companies first entered into a partnership, establishes our role as the platform of choice for mobile money services in Europe.
“Our evolved relationship with FIS ensures that Monitise is ideally placed to play a leadership role in the North American mobile money market, which is following similar trends of growth to those we have experienced in the UK over the past 12 months. It has always been our strategy to partner with the world’s leading companies in a way that ensures optimal value for our shareholders.”
Monitise remained bullish on the prospects for mobile money. It said its “live operations” reached profitability in the year ended June 2011, one year ahead of target. At the end of June 2010, Monitise’s order book was £13m. As at 1 September 2011, when Monitise published its results for the year to end-June 2011, the order book was six times greater at £78m. After doubling revenues in the year ended June 2011, the group said that it is on track to double revenues again in the year ending June 2012 and achieve cash break-even by the end of calendar 2013.