Mobile giant Nokia will buy wireless messaging and e-mail management firm Intellisync to boost its position in the corporate mobile e-mail market, it said on Wednesday.
Nokia, the world’s largest cell-phone maker, said the deal would give it a stronger line-up of products and services for business mobile e-mail, as well as a broader base of customers.
The Finnish firm said it would pay $5.25 for each Intellisync share, giving the company an implied enterprise value of about $430 million.
Analysts said the deal was small but strategically important for Nokia as it aims to sell more phones to business users who want to be able to use e-mail on the move.
It has been making a push into an area pioneered by Canada’s Research in Motion (RIM) with its Blackberry devices, as are other firms ranging from software giant Microsoft Corp. to e-mail firms Visto, Seven and Good Technology.
“The deal fits Nokia’s strategy hand-in-glove,” said Opstock analyst Hannu Rauhala, who has an “accumulate” rating on Nokia.
“Nokia has talked a lot about a software focus, and this creates a clearly good platform,” he said, adding that the takeover would help Nokia maintain and update software on its more sophisticated smartphones as more of the devices are sold.
Analysts said the price appeared a little on the high side, at about six times annual sales, but that was not an issue for the handset maker.
Nokia launched a system earlier this year designed to allow workers at almost any level to send and receive e-mail from their handsets, intended to make it more cost-effective and possible on a wider range of phones.
Range of e-mail systems
Nokia Enterprise Solutions head Mary McDowell said the Intellisync deal means the division will not meet a target of profitability in the first half of 2006.
“We do think this acquisition will impact that, so we are now looking at a profitable 2007,” she told a conference call after the deal was announced.
McDowell said the acquisition would strengthen Nokia’s relationship with mobile phone operators in the United States, adding to its line-up Intellisync’s products that use CDMA (code division multiple access), the main mobile standard in the Americas.
She said Nokia would continue to let users choose from a range of email systems. It already has its own Nokia Business Center and also offers RIM’s Blackberry Connect on some phones.
“Nokia clearly just wants new technology and a bigger selection to offer on its Enterprise unit, and that’s why they are buying Intellisync,” said a Helsinki-based analyst who declined to be identified.
Nokia said it expects to complete the takeover in the first quarter of 2006.