Sinch AB Buying SAP Digital Interconnect For About $250 Million

By Noah Long ● May 6, 2020
  • Cloud communications leader Sinch AB (publ) (OTCMKTS: CLCMF) announced it is buying SAP Digital Interconnect from SAP SE (NYSE: SAP)

Cloud communications leader Sinch AB (publ) (OTCMKTS: CLCMF) and SAP SE (NYSE: SAP) have announced that Sinch AB entered into a definitive agreement to buy SAP’s communications unit SAP Digital Interconnect (SDI). And SDI offers cloud-based communications products and serves over 1,500 enterprise customers throughout the world.

Sinch and SDI share a focus on digital business transformation thus creating a first-class customer experience and ensuring the highest possible quality of services. And Sinch will acquire all assets and IP belonging to SDI.

Sinch — which has a scalable platform for messaging, voice and video — will pay EUR 225 million (approximately $250 million USD) on a cash and debt-free basis. The combined entity will power nearly 70 billion engagements per year. And Sinch will build upon a customer base, which includes many of the world’s most valued brands like top technology companies, banks, payment gateways, retail brands, and mobile operators.

SAP Digital Interconnect consists of three segments: Programmable Communications; Carrier Services; and Cloud Solutions for Enterprises. Programmable Communications powers omnichannel customer engagement through SMS, push, email, WhatsApp, WeChat, and Viber and in 2019, this business processed 18 billion messages on behalf of its enterprise customers. Carrier Services includes a variety of business-critical services to mobile operators, including products for person-to-person messaging, reporting, and analytics — which saw 292 billion carrier messages processed last year. And Cloud Solutions for Enterprises spans products for contact center and critical event management.

This deal significantly strengthens Sinch’s customer-facing, operations, and product and engineering resources in the United States. And it gives the company a larger presence in the Bay Area where SDI is headquartered. Plus it also grows the company’s business in Europe, Asia-Pacific, and India.

This is Sinch’s second transaction exceeding $100 million since late March. On March 26, Sinch said it was acquiring Wavy in a deal valued at $119 million.

Key Quotes:

“With SAP Digital Interconnect now becoming a part of Sinch, we build on our scale, focus and capabilities to truly redefine how businesses engage with their customers, throughout the world. The transaction strengthens our direct connectivity globally. Plus, it enables us to expand and accelerate a range of business-critical services to mobile operators, including products for person-to-person messaging, reporting and analytics.”

– Sinch CEO Oscar Werner

“SAP Digital Interconnect is a leader in its area showing profitable growth and reaching 99 percent of the world’s mobile subscribers. Looking at Sinch’s innovation and investment strategy in the area of cloud communication platforms, we welcome them as the new owner of SDI. Sinch is perfectly positioned to unleash further growth potential we see in SDI.”

-Thomas Saueressig, member of the Executive Board of SAP SE (responsible for SAP Product Engineering).