TIDMXLM
RNS Number : 4566Q
XLMedia PLC
01 September 2014
For immediate release 1 September 2014
XLMedia plc
("XLMedia" or "the Group")
Acquisition of a Social Gaming Marketing Company
Earnings enhancing acquisition into the high growth mobile and
social gaming market place
XLMedia (AIM: XLM), a leading provider of digital performance
marketing services, is pleased to announce the acquisition of
ExciteAd Digital Marketing Ltd ("EDM"), a leading social and mobile
gaming marketing company, for a consideration of up to US$19
million in cash and shares. The acquisition is expected to be
immediately earnings enhancing and is highly complementary to
XLMedia's Media division.
EDM, which trades under the name "DAU-UP" (www.dauup.com),
specialises in social and mobile advertising specifically targeted
at 'user acquisition' for social gaming applications. EDM's
principal geographical market is the US, in addition to other
English and German speaking markets. EDM provides marketing
services primarily to game developers in social and mobile
platforms for either a performance based fee, such as CPI or cost
per installation, or a management fee based on marketing spend.
EDM has an excellent track record of growth, reflecting the
online expansion of the social and mobile gaming market. For the 12
months ended 30 June 2014, EDM delivered revenues of $12.8m and
profit before tax, excluding share based payments, of $3.0m
(Management accounts, Non GAAP). EDM was established in 2010, is
based in Israel and employs 27 staff.
Social Gaming, which involves playing online games (such as
Casino themed, strategy and adventure based) on social media or
community sites, is experiencing significant increased demand
across web, smartphones, and tablets platforms. According to market
specialists Technavio, the demand for these games is expected to
continue to see continued growth with an estimated CAGR of 24% in
the US alone between 2012 and 2016. This strong growth is driven by
the tremendous demand in the mobile and smartphone markets and the
free availability of many of these games.
Strategic Rationale
The acquisition is in line with the Group's strategy, as set out
during its IPO in March 2014, to expand and diversify its
activities into complementary areas and act as a consolidator in a
fragmented market.
EDM is a highly complementary fit with XLMedia's existing
business, delivering a range of synergies and strategic benefits.
The acquisition will diversify the business into new products and
markets, targeting a new customer base, as well as providing
enhanced growth opportunities within existing markets. In
particular, benefits for the Group include:
-- Strong growth in a fast paced and expanding market - social
and mobile games and applications are a fast expanding market which
is not subject to the same regulatory regime as the online gambling
market. EDM will provide the Group additional growth opportunities
in this new area.
-- Social expertise - EDM's expertise in social and mobile
marketing supplements XLMedia's knowledge and understanding in
marketing online gambling.
-- Mobile expertise - approximately 50% of EDM's revenues are
generated through mobile users. Mobile users have also become a
significant part of the online gambling industry, with an
anticipated 44% share of the global interactive gambling market by
2018, according to market research provider H2 Gambling Capital
(H2).
-- Revenue streams from regulated products and markets - social
gaming, which does not involve real money gambling, does not
require a licence. Expanding XLMedia's product range into this
sector will therefore strengthen the Group's position in regulated
online gambling markets such as the US and UK.
-- A new customer base - EDM's customers typically comprise game
developers in social platforms, presenting a new target audience
for XLMedia.
-- An expanded geographic reach - EDM's principal market is the
US, with additional revenues derived from other English and German
speaking markets as well as other countries outside of XLMedia's
core Scandinavian markets, representing diversification for the
Group into new geographies.
-- Strong analytic systems - EDM uses its proprietary internal
systems for both analysis of performance as well as for campaign
definitions and building. Integrating these tools into XLMedia's
own network will contribute to the Group's performance and
improvement.
Consideration and key terms
Under the terms of the share purchase agreement, the Group will
acquire (on a debt free cash free basis) the entire issued share
capital of EDM from its current shareholders which include Mr.Idan
Nizri, the principal shareholder, founder and CEO, as well as other
investors (the "Sellers") for a total consideration of up to US$19
million (approximately GBP11.4 million). XLMedia will pay US$12
million in cash immediately and two additional payments of up to an
aggregate US$7 million will be payable based on EDM's EBITDA
performance during the first and second years after 1 July 2014,
71% of which may (at XLMedia's discretion) be satisfied by the
issue of new ordinary shares in XLMedia("XLMedia Shares"). The
value of any new XLMedia Shares issued will be based on an agreed
trailing average of the closing days trading price prior to
election to issue the relevant shares. Each portion of any share
consideration will be subject to an appropriate slow release
arrangement. Mr. Nizri will remain with EDM for a minimum period of
two years and shall be entitled to a seat on EDM's board of
directors.
Commenting on the acquisition, Mr. Ory Weihs, CEO of XLMedia
said,
"We are delighted to be announcing the acquisition of EDM, our
largest transaction since listing in London. One of the main
reasons behind our IPO was to enable the Group to act as a
consolidator in highly fragmented markets. Since listing, we have
been working hard to execute such deals and are therefore excited
to conclude the acquisition of EDM,a global leader in the social
and gaming marketing arena.
"EDM represents a highly complementary fit for our business, is
immediately earnings enhancing, strengthens our reach in the US,
delivers diversification into social gaming and extends our current
gambling expertise and customer base. We look forward to working
with the EDM team and to continue to execute our stated growth
strategy."
For further information, contact:
XLMedia plc Tel: 020 8817 5283
Ory Weihs
www.xlmedia.com
Buchanan Tel: 020 7466 5000
Jeremy Garcia / Sophie McNulty/ Clare Akhurst
www.buchanan.uk.com
Cenkos Securities plc Tel: 020 7397 8900
Ivonne Cantu/ Callum Davidson
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQEANPFDDDLEFF
Xlmedia (LSE:XLM)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Xlmedia (LSE:XLM)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024