Qualcomm to buy Firethorn for $210 million

Wireless technology developer Qualcomm Inc. said Wednesday that it plans to acquire closely held Firethorn Holdings LLC, an Atlanta-based mobile-banking technology company, for about $210 million in cash.

The acquisition will allow Qualcomm to expand its wireless services for financial institutions and payment processors, the company said in a statement. The deal is expected to close within 30 days.

Firethorn's employees will remain in Atlanta supporting its existing financial institution and operator partners for mobile commerce applications. The Firethorn team will continue to be led by CEO Tripp Rackley, and will be overseen by Len Lauer, executive vice president and group president of Qualcomm.

Founded in 2001 by Rackley, the mobile banking and payments enabler completed a $14.8 million funding round in January 2007. Investors were not disclosed.

For San Diego, Calif.-based Qualcomm the acquisition is a shift in strategy from mobile phone networking into service oriented products. The deal Qualcomm said is intended to help financial institutions speed consumer adoption of mobile banking services.

"The acquisition of Firethorn will allow Qualcomm to help drive the evolution of mobile banking by leveraging Firethorn's industry expertise, reputation and success in developing relationships with financial institutions, wireless operators and payment processors," Lauer said.

Firethorn's financial institution partners include Wachovia Corp., SunTrust Banks Inc., Regions Financial Corp., BancorpSouth Inc. and Synovus Financial Corp., among others.

On Wednesday, AT&T announced that it collaborated with Firethorn and its strategic partner CheckFree, which specializes in financial e-commerce services, to enable mobile banking on cell phones. And in mid-October, Verizon Wireless formed a strategic relationship with Firethorn to give its customers the ability to easily interact with their financial institutions.

Qualcomm expects dilution from the acquisition of about 2 cents per share from earnings for the fiscal year ending September 2008 and a neutral effect in fiscal 2009 earnings per share. A survey of seven analysts by Thomson Financial revealed a median estimate of $1.86 a share for Qualcomm's fiscal 2008.