Bombed-out mobile e-mail specialist Synchronica plans to buy equally depressed Axis Mobile’s operating subsidiary in a £3.9 million paper deal.

Under the proposed deal, Tunbridge Wells-based Synchronica will issue 85 million shares to fellow AIM counter, the Israel-headquartered Axis Mobile, of which 68 million will go directly to Axis convertible debt holders.

Axis, which has been looking for funding after losing £3 million last year despite strong turnover growth, will then wind itself up after receiving another 6.6 million Synchronica shares to cancel a debt owed to the parent Axis company by the operating subsidiary, plus £156,500 cash, and distributing the Synchronica shares it is to receive to its own shareholders.

Synchronica, whose shares have fallen from 103.5p three years ago to 4.25p now, is also raising £5.1 million in a placing at 3p to fund the enlarged business, which chief executive officer Carsten Brinkschulte argues will benefit from combining Synchronica’s strength in professional markets with Axis Mobile’s consumer focus.

He contends that Axis Mobile’s position in Russia, Germany, Switzerland and Eastern Europe will complement Synchronica’s presence elsewhere and allow the combined company to build a ‘stronger product and customer portfolio in emerging markets, such as China, the Middle East, Latin America and Eastern Europe’.

According to Brinkschulte, the enlarged company will be able to strengthen its competitive position in key markets and exploit opportunities for ‘cross-selling and up-selling’ among its different customers.

Axis Mobile shares, which touched 110p in 2005, now languish at 3.12p and the appeal of the enlarged Synchronica will inevitably be speculative.

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Synchronica	AIM	£8.96m	2.50p	0.00p
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