Privately held mobile e-mail provider Visto has agreed to buy rival Good Technology from struggling Motorola to expand its offering and grow scale in a market dominated by Research in Motion (RIM).
Blackberry-maker RIM (NASDAQ: RIMM) created the market for mobile e-mail, holding a dominant position in the corporate sector, and, with Nokia and Microsoft also targeting mobile e-mail, pressure on smaller vendors like Visto is growing.
“The market has been consolidating for awhile and there are more opportunities for consolidation,” Visto CEO Brian Bogosian told Reuters in an interview.
Terms of the transaction were not disclosed. Motorola (NYSE: MOT) bought Good Technology in late 2006 for more than $400 million.
“We were quite profitable before and we continue to be profitable,” Bogosian said, adding the deal doubles Visto’s personnel to more than 400.
Motorola’s quick exit
“The acquisition of Good Technology will give Visto an enhanced presence in the North American market and greater scale which is now essential to compete with Microsoft and RIM,” said Geoff Blaber, analyst with CCS Insight.
“This move draws clear similarities with Nokia’s (NYSE: NOK) decision to pull back from its Intellisync enterprise solutions business.”
Last year, Nokia ceased the corporate e-mail offering it had bought in a $430 million acquisition of U.S. firm Intellisync, but strengthened its push for consumer e-mail.
Motorola, which has been struggling to stem market share losses in its mobile phone business, said it is focusing on its core operations with the deal.
“We believe that this transaction is in the best interest of our customers, employees and shareholders,” Gene Delaney, president of Motorola’s Enterprise Mobility Solutions, said in a statement.
Visto said it expects the deal to close by end-February.
Visto’s investors include Oak Investment Partners, Draper Fisher Jurvetson, Altitude Capital Partners, Meritech Capital Partners and Rustic Canyon Ventures.
Good Technology specializes in offering wireless messaging, mobile virtual private network (VPN) data access, device management and handheld security for enterprise customers.