Swiss mobile software developer Esmertec and France-based mobile software developer Purple Labs will join forces in a new combined business called Myriad Group, uniting their technologies and teams in order to accelerate development of next-generation software for mass-market mobile phones. Purple Labs develops mobile browsers and messaging software, complementing Esmertec's products in Java engines, Android platforms and USSD mobile services. The combined group will have 2009 revenue of approximately USD 125 million and 800 software engineers in Europe, Asia and America. The business combination is anticipated to yield annual operating cost savings of approximately USD 13 million, to be achieved once the two companies are fully integrated in early 2010. Esmertec is acquiring 100 percent of Purple Labs shares from the three venture capital firms Sofinnova Partners, Earlybird Venture Capital and Partners Group, in exchange for 19.68 million Esmertec shares. The agreement also includes an earn-out clause that would provide Purple Labs shareholders a further 4.37 million Esmertec shares if specified targets for 2009 revenue and gross margin are achieved. In addition, the Purple Labs management options scheme will be converted to 1.43 million Esmertec options. This would grow by a further 318,730 Esmertec options if the earn-out is achieved. Subject to approval by its shareholders, Esmertec will change its name to Myriad Group. Purple Labs's current CEO, Simon Wilkinson, will become CEO of Myriad and following the completion of the acquisition, Esmertec's CEO Thomas Hornung will leave the company and act as advisor for the executive team.
