Spring Wireless Acquires Sysgold; Additional Financing Expected

Financial terms weren't disclosed.

The acquisition combines Spring's presence in its home country, Brazil, with Sysgold's operations in six other Latin American countries and the U.S. Sysgold is based in Miami.

In addition, the investors in the venture-backed concerns - which have two investors in common - are likely to make "a follow-on investment" in the combined company, according to Cole Van Nice of Darby Technology Ventures, a Sysgold investor.

The Darby Technology vice president said he expects the new financing to close in January. He declined to give the fund-raising target.

The acquisition will be a stock deal and will make Spring Wireless the remaining company. The deal probably will close in January, Van Nice estimated.

Both companies are backed by Intel Capital, the venture unit of chipmaker and microprocessor company Intel Corp., and Mifactory. Mifactory is a South American venture fund backed by defense and car manufacturing concern Saab AB, cellphone maker and wireless technology company Telefon AB L.M. Ericsson, and Chilean family company Grupo Said Holding Co.

In addition, Darby is an investor in Sysgold, while E-nicial and Banco Pactual are investors in Spring Wireless. Both E-nicial and Banco Pactual, which invested out of its Ideias fund, are Brazilian concerns. Darby is based in Washington, D.C.

Its unclear how much capital the two merging companies have raised total.

With the acquisition, "one of the main reasons for" the deal and for the upcoming financing is international expansion, said Van Nice. Spring Wireless is looking to cover an even larger swath of the globe, he said. "We will be looking at Europe and the U.S.," he said.

Both Sysgold and Spring Wireless had about 150 employees prior to the merger and expect to keep all of those.

Spring Wireless, both before and after the acquisition, is what's known as a mobile virtual network operator, or MVNO. That is a branded mobile service that operates its own brand but uses another company's physical wireless infrastructure.

The better-known MVNOs today are targeted at consumers, such as Boost Mobile and Virgin Mobile. In addition, MVNOs typically have focused on cellular voice services, though some newcomers, such as Amp'd Mobile, are focusing on content.

By contrast, Spring Wireless is targeted at businesses, such as corporations with operations throughout Latin America that want a one-stop-shop for buying wireless services. In addition, it offers mainly data services.

Spring's portfolio of mobile applications includes customer relationship management and sales force automation apps. Those now will be offered along with Spring Wireless's services.