Pelatro PLC (LON:PTRO) Chief Executive Officer Subash Menon caught up with DirectorsTalk for an exclusive interview to discuss their recent acquisition and what this means for the company.
Q1: First off, congratulations on the acquisition that you’ve announced today. Could you give us some background on this?
A1: This is basically an asset acquisition of a competing product which naturally means from a competing organisation and the idea with this transaction is to win a few more customers so that we can ramp up and gain momentum as we move forward.
So, the space is exactly the same, campaign management solutions, that’s the space that we have acquired in for both the customers of that product and a couple of related products as well as the underlying IP.
Q2: So, what was the key rationale for the transaction?
A2: As a product company, it is very important for us to win and have as many customers as possible in as shorter time as possible so that’s what’s this acquisition gets us. It basically gets us two things, one is a set of customers, tier 1 telco’s around the world, the likes of Telenor and ThinkTel, they would become our customers.
We’re also getting three products, one of which is a competing one and two are complementary solutions which would then help us to position the overall offering as a suite, thereby leveraging that to win more contracts in the future.
So, the key rationale is to grow quite significantly over the next few years by taking on these customers and building on top of the strengths of the acquired entity as well as our existing strengths. So, that’s the rationale really to become larger, to gain momentum, to win more customers, to have a suite of products, to showcase and enter foreign new geographies like Central and Eastern Europe at this point in time.
Q3: How is the deal being funded?
A3: Pelatro have raised £6 million by placing shares on AIM and that money is being used to pay for the upfront payment at this point in time. Going forward, subsequent payments, we hope to make from our free cash flow.
Q4: Could you explain a bit more about the Multi-Channel Marketing Hub space?
A4: Pelatro’s space was earlier called Multi-Channel Campaign Management which is now evolving and is now called Multi-Channel Marketing Hub in the sense that it would include not only the campaign management solutions but a few other solutions which are used to segment and target subscribers, send communications, appropriate messages, promotions etc. So, a bunch of solutions which would be very complimentary to Campaign Management solutions would come together to form the Marketing Hub.
So, in this acquisition, I referred to two other products coming, complementary solutions, there’s the Loyalty Management Solutions and Personal Notification Manager, those two along with our existing Campaign Management Solutions would then be the offering for the Marketing Hub.
So, it’s really all about bringing all the marketing solutions to target subscribers, to enhance revenue, all of that, all of the communications that goes to subscribers, the idea is to bring all of that onto one platform and that’s what’s being called the Marketing Hub, that platform. So, that’s the space and now we get into that space with these additional complementary products coming in through the acquisition.
