Contact: Scott Denne
The opportunity to build a community of customers is pushing non-technology companies toward mobile application businesses. The latest such deal, Under Armour’s $150m acquisition of MapMyFitness, shows the opportunity for consumer goods vendors to enter new markets – and expand current markets – by moving into mobile.
Under Armour is covering the entire purchase price in cash, though it hasn’t yet decided if the funds will come from its own balance sheet (it held $186m in cash and equivalents as of September 30), its revolving credit facility or a combination of the two. Allen & Co advised MapMyFitness on its sale, while Peter J. Solomon Company advised Under Armour.
While Under Armour already sells some wearable technology that monitors athletes, it lacks an online and mobile community, which traditional tangible goods suppliers are seeing as increasingly crucial to brand value and customer retention. MapMyFitness changes that. Founded in 2009, the company quickly grew to more than 20 million registered users. And unlike many other fitness applications, which offer little in the way of social networking, MapMyFitness provides a wide-reaching social network of fitness enthusiasts, as well as a directory of fitness events.
The desire to build a live, interactive community reflects the rationale in other similar deals this year, such as Hasbro’s pickup of Backflip Studios, in which the toymaker cited the mobile gaming firm’s existing network of users as part of the motivation for the transaction, and Lonely Planet’s recent acquisition of TouristEye, which has the potential to greatly expand the reach and real-time information of the travel-book publisher’s existing Web community.
Purchases of mobile app developers by non-tech companies this year
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Source: The 451 M&A KnowledgeBase
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