Telefonica Announces JAJAH Acquisition

Spain-based carrier Telefónica has bought itself a very nice present: IP-based managed services provider JAJAH for EUR 145 million ($208.3 million) in an all-cash transaction. The agreement, announced in a formal release Dec.23 but first reported in Reuters (News - Alert) on Dec.21 is subject to formal clearance by CNC, the Spanish competition authority.

 

The announcement provides the public rationale for the deal from both parties. The purchase of JAJAH (News - Alert), says Telefonica via the release, significantly enriches its capabilities to offer cutting-edge communications services for customers online. It points to JAJAH providing a wide range of consumer, small business and enterprise solutions, combining Internet technology with telephony to create what it says are user-friendly, high quality communications services.

 

These are used in around 200 countries by millions of people and are integrated into instant messaging and social media applications as well as through direct-to-consumer services. JAJAH’s business solutions are utilized by thousands of businesses of all sizes worldwide.

 

“The acquisition of JAJAH broadens the scope of our communications offering and opens up new capabilities in the voice communication space,” Matthew Key, chairman and CEO of Telefónica Europe, said. “People using social networking sites such as Twitter now have an even wider range of communications channels available and have the option of speaking directly to each other as well as communicating by text or keyboard.”

 

JAJAH has recently expanded into the social networking channel. In September 2009 JAJAH announced the beta-launch of its Twitter calling solution, JAJAH@call. Qualified JAJAH users with a Twitter account can now make calls via Twitter free of charge. @calls are made without revealing one’s number and without needing to know the number of the person one wishes to call: all one needs is their Twitter username.

 

JAJAH will continue to operate under its current brand reporting into Telefónica Europe, which will be the first of Telefónica’s regional business divisions to offer seamless JAJAH services to customers. Telefónica Europe was advised in the transaction by KPMG, and JAJAH was advised by CFP Corporate Finance Partners. Deutsche Bank acted as advisor in closing procedures.

 

Telefónica Europe is a business division of Telefónica comprising mobile, fixed and DSL operations in the U.K., Ireland, Germany, the Czech Republic and Slovakia, all of which use 'O2' as their consumer brand. Telefónica Europe also has 50 percent ownership of the U.K. and Irish Tesco Mobile and German Tchibo Mobilfunk joint venture businesses. In addition, the group includes the Isle of Man integrated fixed/mobile operator, Manx Telecom. Telefónica Europe is headquartered in Slough, U.K. and has some 48.6 million mobile and fixed customers.

 

“This is a very exciting union of a young, innovative company with one of the largest integrated communications companies in the world,” Trevor Healy (News - Alert), CEO of JAJAH, said.” Together, we look forward to creating the next generation of communication.”