Strategic and Accretive Acquisition Creates
Synergies Across Perion’s Business Units and Prepares Perion for
“Cookie-Less” Future
Perion Network Ltd. (NASDAQ: PERI), a global technology company
that delivers its Synchronized Digital Branding solution across the
three main pillars of digital advertising - ad search, social media
and display / video advertising - announced today that it has
consummated the acquisition of Content IQ (“CIQ”). CIQ is a
privately held company founded in 2014, based in New York City with
offices in Tel Aviv, and employs 51 people. CIQ is a digital
publishing orchestration system with proprietary data algorithms
and analytic tools which deconstruct content, revenue and
distribution to solve today's biggest digital publishing
challenges.
Content IQ Financial Highlights and Outlook
- Revenues for the first nine months of 2019 were approximately
$26 million
- Adjusted EBITDA for the first nine months of 2019 was
approximately $4 million
- Revenues for Full-Year 2019 are expected to be approximately
$39 million
- GAAP Net Income Full-Year 2019 is expected to be approximately
$5.5 million
- Adjusted EBITDA Full-Year 2019 is expected to be approximately
$5.9 million
Under the terms of the agreement, Perion acquired all the shares
of CIQ for a total consideration of $73.05 million, of which $15
million in cash was paid upon closing, with an additional maximum
$11 million will be paid as a retention incentive. As part of the
total consideration, there is a maximum of $47.05 million in
earn-outs over a period of two years. The earn-outs are tied to
revenue and EBITDA-based metrics that would be paid in full if CIQ
generates $158 million in revenues and more than $17 million of
EBITDA in aggregate, over the next two years. Further details on
the agreement terms and earn-out provisions as well as a
reconciliation between GAAP and non-GAAP financial measures are
included in a Form 6-K furnished to the Securities and Exchange
Commission.
Doron Gerstel, Perion’s CEO, commented, “As brands find it
increasingly difficult to effectively tell their story to
consumers, and branded content becomes a more critical and
effective form of engagement, a new paradigm is required. Brands
must gain the ability to scale to highly relevant audiences, and
through that to assert greater control over the media environment.
CIQ’s offering fills this gap and provides Perion with a
proprietary solution that gives publishers and brands the tools
they need to prosper in a challenging digital world.”
Mr. Gerstel continued, “CIQ also prepares Perion for a
‘cookie-less’ environment, as GDPR, CCPA and the advent of other
regulations reshape the digital advertising ecosystem. Without
cookies, publishers will have to find new ways to measure and track
user engagement, thus increasing the value of content and
contextual advertising. The acquisition of CIQ positions Perion to
effectively address these evolving needs of brands, through the
addition of industry-defining ‘pub-tech capabilities’, which use AI
and machine learning to optimize content and page-level reader
engagement.”
Eyal Kaplan, Perion’s Chairman, added, “With the financial
optimization of Perion and the turnaround of our Search business
completed, the Board has prioritized efforts to further expand and
enhance the technological capabilities of our Synchronized Digital
Branding as a key step to drive a more sustainable, predictable and
profitable operating model. The acquisition of CIQ provides a
strategic and significant opportunity for Perion to bolster that
effort as the ad-tech landscape continues to rapidly evolve. I am
confident that this acquisition will further diversify our
offering, providing significant and accretive growth opportunities
across our business. With the earnout, we have prudently structured
the acquisition to reduce risk and to ensure that CIQ’s financial
contribution to Perion’s top and bottom line are properly aligned
with the investment we are making.”
As part of its integration plan, Perion will relocate the CIQ
New York operations into its New York offices to help create a
culture of integrated operations and shared values.
“We couldn’t be more pleased to be joining the Perion family,”
said Asaf Katzir, co-founder of CIQ. “We believe that our core
technology and offering to the publishers are synergetic to
Perion’s vision of establishing a new media supply chain.”
Ziv Yirmiyahu, co-founder of CIQ, added, “This acquisition is
mutually beneficial. For the entire CIQ team, there is a
significant opportunity to achieve exponential growth by leveraging
Perion’s existing network of hundreds of premium publishers and
direct brand relationships, as well as their partnership with
Microsoft Bing.”
Canaccord Genuity and Lake Street acted as special advisors to
Perion.
Perion’s management will present today at the Needham 22nd
Growth conference. Doron Gerstel, Perion’s Chief Executive Officer
will host a group presentation at 8:40 a.m. ET. The group
presentation will be via webcast and can be accessed by using the
following link:
http://wsw.com/webcast/needham94/peri/
Updated IR presentation will be available on Perion’s investor
relations website at https://www.perion.com/ir-info/ as of 9:00
a.m. ET.
About Perion Network Ltd.
Perion is a global technology company that delivers advertising
solutions to brands and publishers. Perion is committed to
providing data-driven execution, from high-impact ad formats to
branded search and a unified social and mobile programmatic
platform. More information about Perion may be found at
www.perion.com, and follow Perion on Twitter @perionnetwork.
About Content IQ
Content IQ is a privately held company founded in 2014, based in
New York City with offices in Tel Aviv, and employs 51 people.
Content IQ has created data algorithm and analytics tools that
deconstruct content, revenue and distribution to solve today's
biggest digital publishing challenges.
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
and Content IQ. The words “will”, “believe,” “expect,” “intend,”
“plan,” “should” 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 and the acquired company, Content IQ, 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, among others, 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 and Content IQ including intense and frequent changes in the
markets in which the businesses operate and in general economic and
business conditions, loss of key customers, unpredictable sales
cycles, competitive pressures, market acceptance of new products,
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, 2018 filed with the
SEC on March 19, 2019. 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/20200114005340/en/
Perion Network Ltd. Investor relations Rami Rozen +972
(73) 398-1000 investors@perion.com Source: Perion Network Ltd.
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