MessageNet acquires Salmat's SMS business for $14.8 million

Marketing services provider Salmat will shed its MessageNet messaging business in a $14.8 million sale to MessageMedia.

The sale is part of Salmat’s aim to focus and strengthen its core business for long-term sustainable growth, the company said in a statement.

Salmat acquired MessageNet in 2010 as part of a $75.3 million deal for four agencies to create Salmat Digital.

“Salmat continues to focus on ensuring that it has the right mix of solutions to deliver on its promise to clients, employees and shareholders in a way that is profitable and sustainable,” Salmat chief executive Rebecca Lowde said.

“With catalogue at the core of our marketing solutions business, Salmat’s digital focus in this segment is on solutions that help us extend the reach of our clients’ marketing campaigns, to help them reach and convert more customers.

Lowde was named chief executive on 12 December after holding the interim role since June, succeeding Craig Dower.

She added that MessageNet’s services were not core to Salmat’s marketing solutions proposition, and agreed to negotiate a sale when the opportunity arose.

“MessageNet is a great fit for MessageMedia, the Australian leader in business messaging solutions,” Lowde said.

“Continuity of service will be maintained throughout the sale process. We are confident that the business will continue to thrive under this new ownership.”

MessageMedia chief executive Nigel Dews said MessageNet “has an excellent record” of providing business messaging solutions to Australian businesses and technology partners.

“I am delighted the MessageNet team will be joining MessageMedia,” Dews said.

“MessageMedia’s strategy of delivering the region’s most innovative portfolio of cloud communication solutions for businesses, centred around messaging is extended with the acquisition of MessageNet.”

“We look forward to working with the MessageNet team.”

The deal is set to complete on 29 December, with the proceeds from the sale will be used to pay down Salmat’s current liabilities.