AUSTIN, Texas, Feb. 26, 2021 /PRNewswire/ -- Digital
Turbine, Inc. (Nasdaq: APPS) announced today that it has entered
into a definitive purchase agreement to acquire AdColony Holding AS
("AdColony") from Otello Corporation ASA ("Otello"), a Norway company and sole shareholder of
AdColony. AdColony is a leading mobile advertising platform
servicing advertisers and publishers with a reach of more than 1.5
billion monthly global users. The Company's proprietary video
technologies and rich media formats are widely viewed as
best-in-class technology delivering industry-leading third-party
verified viewability rates for well-known global brands, such as
Disney, Amazon and BMW.
The acquisition of AdColony is fully consistent with Digital
Turbine's expressed strategy to provide a comprehensive media and
advertising solution for our operator and OEM partners while
enriching the mobile experience for end users by delivering highly
relevant content to their fingertips. The acquisition is
subject to approval of the Otello shareholders and is expected to
close in the Company's fiscal fourth quarter.
Total estimated consideration for the AdColony acquisition is in
the range of $350 million to
$375 million, paid as follows: (1)
$100 million in cash to be paid at
closing, subject to purchase price adjustments, (2) $100 million in cash to be paid six months after
closing, and (3) an estimated expected earn-out payment in the
range of $150 million to $175 million, to be paid in cash, based on
AdColony achieving certain future target net revenues, less
associated cost of goods sold, over the twelve-month period ending
on December 31, 2021. The Company
intends to pay the purchase price with a combination of available
cash on hand and borrowings under its existing senior credit
facility along with future capital financing.
"We are extremely excited to announce the acquisition of
AdColony today," said Bill Stone,
CEO of Digital Turbine. "We look forward to welcoming the
AdColony team to the Digital Turbine family and believe that this
strategic transaction will accelerate our growth and is a positive
for our partners, advertisers, employees and shareholders. AdColony
saw the secular tailwinds toward mobile, video and high-speed
networks like 5G before most and has been able to capitalize on its
vision. The ability for Digital Turbine to utilize AdColony's
unique mobile advertising solutions across our vast device
distribution footprint will unlock significant new monetization
opportunities for the combined company's platform offerings.
With the addition of AdColony, we will expand our collective
experience, reach and suite of capabilities to benefit mobile
advertisers and publishers around the globe.
Performance-based spending trends by large, established brand
advertisers present material upside opportunities for platforms
with unique technology deployable across exclusive access to
inventory."
Mr. Stone concluded, "We look forward to providing more specific
details regarding our forward financial projections for AdColony
after the transaction has closed. Considering the current
run-rate of recurring business at AdColony, along with expected
realized synergies and the terms of consideration, we anticipate
that the AdColony transaction will be substantially accretive to
our expected profitability in the first full year following the
transaction."
"AdColony is excited to join the successful team at Digital
Turbine," said Lars Boilesen, CEO of
Otello. "The underlying strategic rationale for the combination is
very promising. We believe that Digital Turbine, with its
extensive global relationships and distribution, will be uniquely
positioned to benefit via the seamless integration of AdColony's
mobile video advertising expertise and global brand advertiser
awareness. The combination will yield a highly-differentiated
and more vertically-integrated solution for the mobile advertising
industry. We look forward to joining Digital Turbine to help
navigate this innovation."
About Digital Turbine, Inc.
Digital Turbine simplifies content discovery and delivers
relevant content directly to consumer devices. The Company's
on-demand media platform powers frictionless app and content
discovery, user acquisition and engagement, operational efficiency
and monetization opportunities. Digital Turbine's technology
platform has been adopted by more than 40 mobile operators and OEMs
worldwide, and has delivered more than three billion app preloads
for tens of thousands of advertising campaigns. The Company is
headquartered in Austin, Texas,
with global offices in Arlington,
Durham, Mumbai, San
Francisco, Singapore and
Tel Aviv. For additional
information visit www.digitalturbine.com.
Follow Digital Turbine:
Twitter: https://twitter.com/DigitalTurbine
Facebook: https://www.facebook.com/DigitalTurbineInc
LinkedIn:
https://www.linkedin.com/company/digital-turbine?trk=tyah&trkInfo=tas:digital+tur
Forward-Looking Statements
This news release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements in this news release that are not statements of
historical fact and that concern future results from operations,
financial position, economic conditions, product releases and any
other statement that may be construed as a prediction of future
performance or events, including financial projections and growth
in various products are forward-looking statements that speak only
as of the date made and which involve known and unknown risks,
uncertainties and other factors which may, should one or more of
these risks uncertainties or other factors materialize, cause
actual results to differ materially from those expressed or implied
by such statements. These factors and risks include:
- a decline in general economic conditions nationally and
internationally
- decreased market demand for our products and services
- market acceptance and brand awareness of our products
- risks associated with indebtedness
- the ability to comply with financial covenants in outstanding
indebtedness
- the ability to protect our intellectual property rights
- risks associated with adoption of our platform among existing
customers (including the impact of possible delays with major
carrier and OEM partners in the roll out for mobile phones
deploying our platform)
- actual mobile device sales and sell-through where our platform
is deployed is out of our control
- risks associated with our ability to manage the business amid
the COVID-19 pandemic
- the impact of COVID-19 on our partners, digital advertising
spend and consumer purchase behavior
- the impact of COVID-19 on our results of operations
- risks associated with new privacy laws, such as the European
Union's GDPR and similar laws which may require changes to our
development and user interface for certain functionality of our
mobile platform
- risks associated with the timing of our platform software
pushes to the embedded bases of carrier and OEM partners
- risks associated with end user take rates of carrier and OEM
software pushes which include our platform
- new customer adoption and time to revenue with new carrier and
OEM partners is subject to delays and factors out of our
control
- risks associated with fluctuations in the number of our
platform slots across US carrier partners
- required customization and technical integration which may slow
down time to revenue notwithstanding the existence of a
distribution agreement
- risks associated with delays in major mobile phone launches, or
the failure of such launches to achieve the scale
- customer adoption that either we or the market may expect
- the difficulty of extrapolating monthly demand to quarterly
demand
- the challenges, given the Company's comparatively small size,
to expand the combined Company's global reach, accelerate growth
and create a scalable, low-capex business model that drives EBITDA
(as well as adjusted EBITDA)
- ability as a smaller company to manage international
operations
- varying and often unpredictable levels of orders; the
challenges inherent in technology development necessary to maintain
the Company's competitive advantage such as adherence to release
schedules and the costs and time required for finalization and
gaining market acceptance of new products
- changes in economic conditions and market demand
- rapid and complex changes occurring in the mobile
marketplace
- pricing and other activities by competitors
- technology management risk as the Company needs to adapt to
complex specifications of different carriers and the management of
a complex technology platform given the Company's relatively
limited resources
- risks and uncertainties associated with the completion and
integration of the acquisition of AdColony, including the
satisfaction of closing conditions
- the impact on our operations and stock price if the acquisition
of AdColony is not completed
- risks and uncertainties associated with the integration of the
acquisition of AdColony, including our ability to realize the
anticipated benefits of the acquisition and the satisfaction of
related earn-out provisions
- other risks including those described from time to time in
Digital Turbine's filings on Forms 10-K and 10-Q with the
Securities and Exchange Commission (SEC), press releases and other
communications.
You should not place undue reliance on these forward-looking
statements. The Company does not undertake to update
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Investor Relations Contacts:
Brian Bartholomew
Digital Turbine
brian.bartholomew@digitalturbine.com
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SOURCE Digital Turbine, Inc.