Synchronica buys Axis Mobile, raises new funding

LONDON, Aug 18 (Reuters) - British mobile technology group Synchronica (DAU.L) said on Monday it had agreed to buy the operating subsidiary of its rival Axis Mobile AXMO.L, in a deal funded by the issue of 85 million new shares.

Synchronica Chief Executive Carsten Brinkschulte said the acquisition gave the group a leading position in mass-market mobile email technology, and took it into new markets in Russia and Eastern Europe.

"We are aiming to build the market leader in the mass market mobile email space," he told Reuters in a telephone interview.

"Synchronica has a very good product for mobile gateways that reaches the vast majority of companies in the marketplace, but we had a hole in the portfolio at the lower end."

Brinkschulte said the companies used the same Java-based technology, and they would combine products as aggressively as possible.

Axis Mobile Chief Executive Sharon David said in a statement the sale was in the best interest of shareholders, given the problems the company had in collecting revenues from new accounts and a deterioration in its working capital.

Synchronica also said it had conditionally raised 5.1 million pounds ($9.53 million) in two placings at 3 pence a share to fund the combined business.

Its shares were down 5.6 percent at 4.25 pence at 1116 GMT reflecting dilution concerns, said Finncap analyst Paul Cornelius, who has initiated on the stock.

He said the fall had been overdone, given the increase in scale the deal brings to Synchronica.

"The integration of a well-capitalised market leader should accelerate the development of Synchronica," he said. (Reporting by Paul Sandle, editing by Will Waterman)