Purple Labs acquires mobile browser business from Openwave

Chambéry, France – July 3, 2008 – Purple Labs, a French developer of Linux-based mobile software, today announced that it has completed its acquisition of the mobile client software business of California-based Openwave Systems, in an asset sale valued at more than $32 million. The browser and messaging products acquired in the deal are among the best-selling mobile applications in the world, having already shipped in more than 1.5 billion mobile phones.

Following the acquisition, Purple Labs now supplies mobile browser software to all of the top 5 phone manufacturers, which together produce over 80% of the world’s mobile phones.

Under the terms of the deal, Purple Labs has acquired the products, software code, patents and customer contracts of the Openwave business. For the quarter ending in March, Openwave had reported $11.1 million in revenues from these customer contracts, including software license fees and related engineering services.

Purple Labs Commits to Further Investment in Browser and Related Technologies In a letter sent today to mobile phone manufacturers, Simon Wilkinson, Purple Labs CEO, outlined the company’s plan for the newly acquired business.

“Purple Labs will continue to maintain the existing products, and invest in the next-generation Surfer browser and other advanced mobile Internet technologies,” said Wilkinson.  “In addition to the California-based development team we acquired from Openwave, we already have 75 engineers at our development centre in Chambéry, France and plan to grow this team aggressively.  Our aim is to extend the industry leadership established so well by Openwave.”

“Further, we plan to reuse many of the Openwave technologies in our Purple Labs Linux platform.  We are focused exclusively on the requirements of LiMo Foundation members such as Vodafone and Orange – and believe that this will ultimately create new market opportunities for our manufacturer customers.”

Gordon Tsang Appointed GM of the Acquired Business Purple Labs also informed customers today that it has appointed Gordon Tsang to be general manager for the browser/messaging business unit. Effective immediately, Tsang now heads a global sales and engineering support team with offices in California, Beijing, Hong Kong, Seoul, Tokyo and Manchester, England. About 80 employees are expected to move from Openwave to Purple Labs.

Tsang is unusually well prepared to assume his new general manager role, having been employed in the same capacity at Openwave before joining Purple Labs earlier this year as senior vice president of sales in Asia.

“Gordon is a proven leader, and his strong track record while at Openwave ensures a smooth transition for the customers and employees now moving to Purple Labs,” said Simon Wilkinson, Purple Labs CEO. “We are committed to making this as seamless as possible for everyone involved.”

Effectively a Management Buy-Out
Tsang is, in fact, one of several ex-Openwave executives now with Purple Labs.
The messaging technologies in the newly acquired portfolio were originally developed by a UK start-up called Magic4, where Wilkinson was founder and CEO. Magic4 rapidly became the global leader in messaging before being acquired by Openwave in 2004, at which time Wilkinson, Tsang and other Magic4 executives moved to leadership roles at Openwave. Wilkinson reunited the team at Purple Labs after taking the CEO role there in October of last year.

“The opportunity to acquire the Openwave business was unexpected, but fits very well with the mobile Linux strategy that Purple Labs was already pursuing,” said Wilkinson. “And given that several of us previously led this Openwave business, our investors are confident that we can integrate the operations effectively and deliver the financial return they require.”

Based in Chambéry, France, Purple Labs is funded by three European venture capital firms: Sofinnova Partners, Earlybird Venture Capital, and Partners Group.

Financial Terms
Under the terms of the definitive agreement, Openwave transferred assets of its client software business to Purple Labs on June 27, 2008 in exchange for $30 million in cash, an additional $2 million if certain conditions are met, and warrants to purchase 2% of Purple Labs common stock.  Additionally, Openwave will provide transition services for up to six months, and bear the first $2 million of such expenses, to smoothly transfer the client business to Purple Labs.

Advisors to Purple Labs
Cooley Godward Kronish represented Purple Labs in its agreement with Openwave Systems.

Ernst & Young and Eversheds acted as financial and legal advisors to Purple Labs.