The private equity firm which now owns leading risk, analytics and RAFM provider Mobileum is suing the previous owners for fraudulently inflating the apparent value of the business, reports Bloomberg.
HIG Capital purchased Mobileum in 2022 in a deal worth USD915mn. Now they say that executives working on behalf of previous owners Audax engaged in “brazen, massive, systematic fraud”. Per Bloomberg:
At the behest of Audax, Mobileum managers artificially inflated the telecom firm’s revenue numbers by making up phony client invoices from a sham company, according to legal filings. H.I.G. executives only learned about the pumped-up numbers after the deal closed, according to the suit.
Audax deny the claims. They told Bloomberg that they intend to fight the lawsuit vigorously.
Mobileum insiders indicate that founder and former CEO Bobby Srinivasan has been marginalized since HIG Capital took ownership and placed their own people into key positions, including a new CFO and an interim CEO. Srinivasan has aggressively driven the growth of Mobileum during his 10 years at the helm. The company changed its name from Roamware in 2014 to signal a shift towards a more extensive portfolio of products and services. Srinivasan’s acquisition-led strategy included taking over global RAFM market leaders WeDo in 2019 and then purchasing test call generation leaders SIGOS in 2020.