Transaction allows Perion to be at the
forefront of the fast-growing DOOH channel, further diversifying
its offering and expanding its global footprint
Perion Network Ltd. (NASDAQ and TASE: PERI), connecting
advertisers with consumers through technology across all major
digital channels, announced today that it has completed the
acquisition of Hivestack Inc., a global innovative full-stack
programmatic digital out of home (DOOH) company. The terms of the
transaction include US $100 million in cash paid upon closing and a
3-year employee retention and performance-based payment plan of up
to US $25 million.
DOOH advertising transforms ordinary public spaces into dynamic
experiences, engaging audiences with eye-catching, personalized
content in real-time. It harnesses cutting-edge technologies to
target, deliver and measure unforgettable, immersive ads that
connect brands with people on the go. With the acquisition of
Hivestack, a programmatic DOOH technology innovator since 2017,
Perion is entering an exciting market at its nascent stage,
positioning the company to capitalize on its anticipated
growth.
Hivestack’s platform is used by many of the world's largest
brands, agencies, media owners, and partners including Uber,
Colgate, Lego, InterContinental Hotel Group, Doordash, GroupM,
dentsu, The Trade Desk, Xandr, Clear Channel, Lamar, Stroër, and
many more.
"We are excited about the acquisition of Hivestack, which both
complements and advances our long-term growth strategy. Hivestack’s
DOOH technology platform stands out by offering brands and
advertisers what they crave the most: high-visibility creative,
precise targeting, immediate impact, wide reach and measurement,"
said Tal Jacobson, CEO of Perion. "In addition to advancing our
diversification strategy, this transaction aligns with our
objective to expand our technological capabilities and product
offerings, and we will continue to pursue additional inorganic
growth opportunities."
More Regions. More Reach. More Technology
- Hivestack’s state-of-the-art platform is deployed in 32
countries, spanning North America, EMEA, LATAM and APAC. This
global footprint will enable Perion to capitalize on economic
trends impacting advertising budgets globally, and offer a variety
of solutions in these additional markets.
- This transaction significantly contributes to Perion’s
diversification strategy, enabling it to establish a considerable
footprint in the fast-growing DOOH channel, which according to a PQ
Media research report, is predicted to increase from US$21.5
billion in 2023 to US$30.7 billion in 2026, reflecting a 15.3%
CAGR.
- Hivestack offers media owners an array of purpose-built
software like the DOOH Ad Server, SSP, and Header Bidder, designed
to manage, deliver, and optimize targeted advertising on digital
screens, enhancing yield and sourcing demand efficiently.
- For media buyers, Hivestack's DOOH DSP, along with tools for
audience planning and campaign measurement, provides robust
capabilities for sourcing optimal inventory and maximizing the
effectiveness and ROI of DOOH advertising campaigns.
- This acquisition is expected to create synergistic
opportunities with Perion’s existing advertising offering and
business and fits nicely with the company’s retail network
strategy.
Mr. Jacobson concluded, “We welcome Hivestack and its impressive
team of professionals to Perion. We look forward to capitalizing on
the synergies between Hivestack’s technology and Perion’s existing
solutions, to provide clients an even more comprehensive,
end-to-end offering.”
Andreas Soupliotis, Founder and CEO of Hivestack, said, "Joining
Perion marks a significant milestone in our journey. The strength
of our technology, coupled with Perion’s market expertise and
compelling advertiser solutions, will result in new synergetic
solutions that resonate with customers on a worldwide scale. We are
thrilled about the endless possibilities that this unlocks."
Jefferies LLC acted as financial advisor to Perion.
Transaction Terms
Under the terms of the agreement, Perion acquired Hivestack for
US$100 million in cash and will pay up to an additional US$25
million (in cash and equity) structured as a three-year employee
retention and performance-based payment plan. The performance-based
payment plan is tied to EBITDA and contribution ex-TAC annual
targets (as defined in the agreement) and will be paid in full if
Hivestack generates an aggregate of approximately US$56 million of
EBITDA and US$212 million of contribution ex-TAC in aggregate
during 2024 through 2026 as shown in the table below. Perion
financed the acquisition using cash on its balance sheet.
In USD millions
2023E
2024-2026 Aggregate
Targets2
3-Year Target CAGR
Revenue
$45
$300+3
43%3
Contribution ex-TAC1
$33
$212
40%
Adjusted EBITDA1
-$3
$56
-
- Contribution ex-TAC and Adjusted EBITDA
of Hivestack are non-GAAP measures. With respect to Hivestack’s
2023 estimated results, we have not provided an outlook for GAAP
Income from operations or reconciliation of Adjusted EBITDA
guidance to GAAP Income from operations, the closest corresponding
GAAP measure, because we do not provide the reconciling items on a
consistent basis due to the variability and complexity of these
items. Hence, we are unable to quantify these amounts without
unreasonable efforts.
- Represent targets that will generate
performance-based payments if achieved.
- Estimated revenue target CAGR is based on
$300 million.
In the past number of years, Hivestack has invested
significantly in building its innovative technology infrastructure
and expanding its global footprint. This has laid the foundation
for strong growth and profitability going forward, enhanced by
Perion's ability to scale and the new synergies formed.
Conference call
Perion will host a ZOOM conference call on Tuesday, December 12,
at 8:30 a.m. ET to discuss the details of the acquisition.
Please join the call using the following Zoom link:
https://incommconferencing.zoom.us/webinar/register/WN_7pm4ooKCRjWCCzd5YujxMg
About Hivestack
Hivestack is a leading global, full-stack, marketing technology
company, powering the buy and sell side of programmatic digital
out-of-home (DOOH) advertising. Hivestack was founded in 2017 with
headquarters in Montreal, Canada, and operates in 32 countries
across the globe.
About Perion Network Ltd.
Perion is a global multi-channel advertising technology company
that delivers synergistic solutions across all major channels of
digital advertising – including search advertising, social media,
display, video and CTV advertising. These channels converge at
Perion’s intelligent HUB (iHUB), which connects the company’s
demand and supply assets, providing significant benefits to brands
and publishers.
For more information, visit Perion's website at
www.perion.com.
Non-GAAP Measures
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude certain items. This press release includes
certain non-GAAP measures of Hivestack, including Contribution
ex-TAC, and Adjusted EBITDA. Contribution ex-TAC of Hivestack
presents revenue reduced by traffic acquisition costs and media
buy, reflecting a portion of the revenue that must be directly
passed to publishers and media owners or advertisers and presents
revenue excluding such items. We believe Contribution ex-TAC is a
useful measure in assessing the performance of Hivestack because it
facilitates a consistent comparison against the core business
without considering the impact of traffic acquisition costs and
media buy related to revenue reported on a gross basis. Adjusted
Earnings Before Interest, Taxes, Depreciation and Amortization
("Adjusted EBITDA") is defined as Hivestack’s income from
operations excluding stock-based compensation expenses,
depreciation, amortization of acquired intangible assets, retention
and other acquisition-related expenses and gains and losses
recognized with respect to changes in the fair value of contingent
consideration. These non-GAAP measures are among the primary
factors management uses in planning for and forecasting future
periods. Furthermore, the non-GAAP measures are regularly used
internally to understand, manage and evaluate our business and make
operating decisions, and we believe that they are useful to
investors as a consistent and comparable measure of the ongoing
performance of Hivestack’s business. However, the non-GAAP
financial measures are not meant to be considered in isolation or
as a substitute for comparable GAAP measures. Additionally, these
non-GAAP financial measures may differ materially from the non-GAAP
financial measures used by other companies.
Forward Looking Statements
This press release contains historical information and
forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995 with respect to the
business, financial condition and results of operations of Perion.
The words “will,” “believe,” “expect,” “intend,” “plan,” “should,”
“estimate” and similar expressions are intended to identify
forward-looking statements. Such statements reflect the current
views, assumptions and expectations of Perion with respect to
future events and are subject to risks and uncertainties. Many
factors could cause the actual results, performance or achievements
of Perion to be materially different from any future results,
performance or achievements that may be expressed or implied by
such forward-looking statements, or financial information,
including, but not limited to, the current war between Israel and
Hamas and any worsening of the situation in Israel such as further
mobilizations, the failure to realize the anticipated benefits of
companies and businesses we acquired and may acquire in the future,
risks entailed in integrating the companies and businesses we
acquire, including employee retention and customer acceptance; the
risk that such transactions will divert management and other
resources from the ongoing operations of the business or otherwise
disrupt the conduct of those businesses, potential litigation
associated with such transactions, and general risks associated
with the business of Perion including intense and frequent changes
in the markets in which the businesses operate and in general
economic and business conditions, loss of key customers, data
breaches, cyber-attacks and other similar incidents, unpredictable
sales cycles, competitive pressures, market acceptance of new
products, changes in applicable laws and regulations as well as
industry self-regulation, inability to meet efficiency and cost
reduction objectives, changes in business strategy and various
other factors, whether referenced or not referenced in this press
release. Various other risks and uncertainties may affect Perion
and its results of operations, as described in reports filed by
Perion with the Securities and Exchange Commission from time to
time, including its annual report on Form 20-F for the year ended
December 31, 2022 filed with the SEC on March 15, 2023. Perion does
not assume any obligation to update these forward-looking
statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20231212350391/en/
Contact Information Perion Network Ltd. Dudi Musler, VP
of Investor Relations +972 (54) 7876785 dudim@perion.com
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