SMSPortal is a South African–based SMS specialist and is one of the largest aggregators in the SMS market, with over twenty years in business. This is a classic bolt-on acquisition for LINK. SMSPortal will continue to operate as a separate entity, with the team staying in Cape Town.
LINK has been transparent about its acquisition criteria. Ideal targets are profitable businesses with strong local market presence and clear post-deal synergies. For companies meeting these standards, LINK typically pays 6–9x EBITDA. And this is where the deal structure gets interesting.
The upfront consideration is a mix of $100M in cash and $15M in LINK company stock. Based on SMSPortal’s current EBITDA, this values the business at just 4.6x EBITDA, below LINK’s published range. However, if SMSPortal hits certain post-deal targets, LINK will pay an additional $30M, increasing the total valuation to 5.8x EBITDA—right at the lower end of LINK’s typical range.
The deal structure, with a lower upfront multiple and an earn out, demonstrates LINK’s discipline and flexibility in valuation, rewarding future performance while protecting downside risk.
This is a major accomplishment for cofounders Charles Stretch and James Pearce—a life journal moment in their twenty-year journey. Charles says it best:
“SMSPortal was built on showing up day in and day out. We invested in an exceptional team, developed products we could be proud of, and placed our customers at the center of everything we did. That unwavering focus, underpinned by consistency and care, gave us the platform to scale.”
This is LINK’s third acquisition of the year, proving that if you know who you are and where you want to go, it becomes easier to be opportunistic about M&A. LINK’s head of M&A, Kasper Lund Hansen, captured this perfectly:
“Messaging is fundamentally global, and SMSPortal exemplifies the kind of innovative, profitable platforms we value. We’ve long respected their achievements in South Africa and internationally and look forward to seeing LINK and SMSPortal grow together.”
Congratulations to both teams!