Supported a leading MNO in South-East Asia on an assessment of a digital wallet provider, to strengthen its positioning in the mobile payments space
Project experience | Strategy
The problem
- A leading MNO in a South-East Asian country was considering an acquisition in the digital wallet space as it saw an opportunity to combine this its existing physical network business to build a comprehensive payments proposition that could evolve into new areas
- The client engaged Analysys Mason to conduct a detailed review of the Target, define a broad strategic approach for the combined business and develop a high-level business plan before it made its final investment decision
The solution
- We developed an in-depth understanding of the Target’s value proposition and assessed its performance on standard KPIs such as growth in registered/ active users and merchant partners, churn rate, promotional spend and ASPU1
- We also looked at how the Target was placed against its competitors and what unique risk factors were associated with its business
- We reviewed the business plan to assess whether the Target’s revenue and cost forecasts were reasonable and in line with international benchmarks and historical market trends
- We assessed how the Target’s business fitted our client’s current payment offering and identified potential synergies and benefits to develop a high-level business plan for the combined entity (post synergies in revenue and costs)
- Finally, we developed an investment thesis for our client, clearly articulating the potential benefits and risks, and the expected return and timescales associated with the investment
Figure: Illustration of integration benefits identified during the study
The result
- We developed a comprehensive report to enable our client to understand the Target’s business, the synergies with its own services and the financial implications (e.g. capital required), as well as providing a broad perspective on the investment (e.g. benefits, risks, timescales for return)
- The client subsequently made an investment in the Target
1Average spend per user