Deals
XLMedia PLC Acquires Marmar Media Ltd
XLMedia (AIM: XLM), a leading provider of digital performance marketing services, is pleased to announce that it has entered into an agreement to acquire a majority stake of 54% in Marmar Media Ltd ("Marmar"), a performance media company for web and mobile for a consideration of up to $7.36 million in cash. The acquisition is expected to be immediately earnings enhancing and is highly complementary to the Group's established media division.
Marmar (www.marmarmedia.com) specialises in performance based marketing for a number of verticals including apps, software entertainment and to a lesser degree gambling. Marmar generated revenues and EBITDA of $11 million and $2.2 million (non GAAP) in FY 2014 respectively. Over 30% of Marmar's revenues are derived from mobile devices and Marmar expects this rate to grow to over 50% in the current year. Marmar was founded 2011, is based in Tel Aviv and has 16 staff.
Strategic rationale for the acquisition
XLMedia's stated strategy is to expand its business both organically and through acquisitions, while diversifying into new products and markets, and act as a consolidator in a fragmented market.
The acquisition of Marmar is highly complementary to the Group's existing business, and delivers the following key benefits:
- Broaden the Group's Mobile capabilities - Additional mobile know-how and capabilities, which will further strengthen XLMedia's growth in the mobile channel
- Market and product diversification - Marmar's main activities are in marketing apps, e-commerce and software products. Marmar's main markets are the US and Europe, adding further product and geographic expansion of the group's historical core markets
- Benefits of scale - Marmar's business is similar in many aspects to the Group's media divisions and therefore once integrated management will be able to use the Group's facilities and infrastructure in order to enhance performance and support further growth. Integrating Marmar into the Group should also provide benefits of scale as a result of adding more campaigns and revenues using the existing operational structure.
Key terms
The Group will buy 54% of Marmar's share capital from its current sole shareholder, Mr. Oren Avidor, for a total consideration of up to $7.36 million in cash, comprised of an initial payment of $5.36 million and additional contingent consideration of up to $2 million based on Marmar's EBITDA performance during the year ending March 31, 2016. Marmar's key management will remain in their position following closing. Acquisition is expected to complete on 1 July 2015.
Ory Weihs, Chief Executive Officer of XLMedia, commented:
"We are delighted to announce the acquisition of a majority stake in Marmar Media, which is a highly complementary fit to the Group's existing business. One of the reasons for becoming a public company was to enable the Group to grow through acquisitions and act as a consolidator in what we believe is a highly fragmented market. We believe this transaction is another good example of such an opportunity to add another performance media company to the Group, delivering value to our shareholders and scale to our business.
"We have been investing significantly in both our infrastructure and technology over the last 12 months, and believe we are now beginning to see the real benefits of this investment delivering both scale and profit growth for the Group.
"Marmar complements the group's offering, bringing additional know how and mobile understandings in additional markets and products. The board is happy to further diversify the group's revenues and customer base. We look forward to working with the Marmar management team to integrate the business and grow the media division together. "
Comments