Cisco has offered the equivalent of US$730 million for cloud-based customer experience firm IMImobile, a figure that represents a hefty premium on its current share price.
The US tech giant has reached agreement with IMImobile on a 595 pence-per-share offer that has been recommended by its board of directors and is slated to close in the first quarter of next year, subject to the usual Ts and Cs, including IMImobile shareholder approval and receipt of various regulatory consents.
London-listed IMImobile’s share price has been hovering at around the 400 pence mark for much of the past three months and spent much of 2020 to date closer to 300 pence. At close to £6 a pop, it looks like Cisco is paying over the odds for those shares, but there are reasons for the price tag.
Dan Ridsdale, Managing Director of Technology and Platform at Edison Group, notes that there is significant value left in some UK tech assets, where the sector has not rallied as strongly as it did in the US.
“The healthy premium reflects in part that [IMImobile’s] valuation has lagged many of its tech peers and the strategic fit with Cisco’s strategy to create a comprehensive Customer Experience as a Service (CXaaS) offer for customers,” Ridsdale said.
Indeed, Cisco has a clear plan for its new asset, presuming all the relevant ‘i’s are dotted and ‘t’s crossed in the coming weeks. It aims to use IMImobile’s cloud communications software to embed omnichannel engagement into a CXaaS offer.
“IMImobile’s omnichannel capabilities make it easy for any marketing or service organization to message with their customers on any channel their customers prefer including WhatsApp, Apple Business Chat and Google RCS,” explained Omar Tawakol, Vice President and General Manager of the Cisco Contact Center Business Unit, in a blog post.
“In addition to making it as easy to communicate, IMImobile provides the ability to easily alter workflows with low code orchestration capabilities. Finally, IMImobile also makes these same workflows programmable with enterprise CPaaS APIs that meet the needs of enterprise developers,” he wrote.
Cisco aims to combine these capabilities with its Webex Contact Center to provide what it describes as “a robust CXaaS offer,” that will help organisations provide better experiences across the whole customer lifecycle, backed by technologies including AI.
“We believe there will be a world of dynamic, always-on connections between global businesses and their customers and the combination of our respective technologies will enable to us make every interaction matter more for our clients,” said IMImobile chief executive Jay Patel.
Once the transaction is complete, IMImobile will join Cisco’s Cisco’s Contact Center business unit.
The deal is the latest in a series of industry announcements that serve to underscore the growing importance of customer experience in the broader sense, but also of the requirement for businesses to engage with customers across a variety of channels.
Just last week Japan’s Softbank ploughed close to US$700 million into Swedish customer engagement specialist Sinch, while customer care and business services provider Telus International announced the C$1.2 billion purchase of Lionbridge AI a month ago, to name but two.
There is money to be made in good customer engagement and as such there are companies willing to spend big to facilitate it.