Sir David and Sir Frederick Barclay, the new owners of the Telegraph Group, spent £1.72m yesterday taking a 7.55 per cent stake in MonsterMob, the Aim-quoted content company for mobile phone downloads.
MonsterMob shares soared 30 per cent on the news, valuing the four-year-old business at £31.8m. The twins bought the stake through TecCapital, their Bermuda-based venture capital vehicle whose ultimate controlling company is Oakpoint Holdings, registered in the British Virgin Islands.
MonsterMob provides a variety of content from games to ring tones to pictures of busty blondes for mobile phone users to buy and download onto their handsets. It also sells to network operators such as Verizon in the US and China Mobile, supplying them with content such as ring tones licensed from record companies.
The Barclays snapped up stakes from several former directors who have left MonsterMob in recent months and whose lock-in periods were lifted to allow TecCapital to acquire their shares. The ex-directors who are selling are Lee Dudack, the former finance director, Mike Watt, the erstwhile marketing director, and Alan Denyer, the ex-sales director. Gavin Whyte, another seller, will remain with the company to roll out its international sales initiative. The company is still seeking a new finance director.
Richard Faber, the managing director of TecCapital, will take a seat on the Monstermob board as a non-executive director. Mr Faber said: "We believe it is undervalued. We think it's in a very interesting sector that we have experience in and we think Martin Higginson [Monstermob's founder and chief executive] has a strong track record. We believe this is a huge growth sector and the market is consolidating fast."
Mr Faber said TecCapital had no plans to seize control of the company but if MonsterMob required more cash in future then TecCapital would consider the proposals. However, the company is not in need of cash for the foreseeable future. It operates profitably having reported a half-yearly turnover of £8.7m in the six months to June. It made a pre-tax profit before exceptionals of £1.2m.
Mr Higginson said: "They [the Barclays] are well known for their interest in the media and it is a strategic investment for them. As a company we are now developing into a media business. As we've grown we've replaced individuals with more media savvy people."
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies