Transaction is Immediately Accretive and is
Expected to Accelerate Perion’s Rapidly Growing Video Advertising
Business; Management Raises 2021 and 2022 Revenue and EBITDA
Guidance
Perion Network Ltd. (NASDAQ: PERI), a global advertising
technology company that delivers a holistic solution across the
main pillars of digital advertising – search, social media,
display, and video / CTV – announced today the acquisition of
Vidazoo, a leading video technology company that enables both
advertisers and publishers to deliver high impact content and
advertising to consumers. Perion acquired Vidazoo for a total
amount of $93.5 million, consisting of $35.0 million in cash upon
closing with an additional maximum of $58.5 million structured as a
performance earn-out, if certain EBITDA-based targets are
achieved.
Vidazoo Financial Highlights and
Outlook
2020 Actual
2021 Outlook
YOY Growth Rate
Revenue
$31.9M
$45M
41%
Adjusted EBITDA
$4.3M
$8M
86%
Vidazoo, founded in 2014 by Daniel Slivkin, Gal Dagan and Roman
Svichar, and headquartered in Tel Aviv, is a highly differentiated
video monetization platform which allows digital publishers to
generate new, incremental revenue through its unique set of video
products.
“The video advertising market is massive but highly concentrated
among the largest publishers and broadcasters,” said Doron Gerstel,
Perion’s CEO. “Just as Shopify’s platform enables thousands of
stores to compete with Amazon and Walmart, Vidazoo empowers hundreds of video-hungry publishers with
a simple, highly scalable, plug-and-play video solution.
By combining our high-impact video suite and Vidazoo’s unique
online video player (OVP), we are offering an END to END video
solution, eliminating all existing intermediate functions, and
creating a direct, simpler and transparent relationship between
advertisers and publishers.”
Vidazoo’s video monetization solution is differentiated by three
unique capabilities:
- A proprietary online video player (OVP) and
integrated ad server, which allows publishers and brands to
upload, manage and stream video content. Vidazoo’s OVP is certified
with the major advertising platforms and compatible with all
devices and video formats. The Vidazoo OVP is integrated with a
proprietary ad server, ensuring a consistent user experience
by reducing latency and errors, adding to its inherent power and
efficiency.
- A sophisticated yield management platform (YMP),
which automatically optimizes and prioritizes publishers’ direct
campaigns and open marketplace demand based on specific KPIs, and
which is expected to be embedded into Perion’s intelligent hub
(iHub).
- A rich video content and ad marketplace, with
connections to multiple content providers and more than 20
programmatic platforms. Perion will expand this marketplace with
its existing buy side relationships.
Daniel Slivkin, Chief Executive Officer of Vidazoo, commented,
“We are thrilled to be joining the Perion family to drive continued
growth and vision of Vidazoo video monetization technology across
all screens. Through Perion’s HUB we will have direct access to
high-impact video campaigns which is what premium publishers are
looking for. Perion is an ideal growth partner and opportunity
multiplier, across all dimensions of our current and future
business.”
Raymond James acted as financial advisors to Perion.
Transaction Terms
Under the terms of the acquisition agreement, Perion has
acquired all the shares of Vidazoo for $35.0 million in cash upon
closing, with an additional maximum of $58.5 million structured as
a performance earn-out through 2023. The earn-outs are tied to
EBITDA-based metrics that would be paid in full if Vidazoo
generates $32.4 million of Adjusted EBITDA in aggregate, through
the end of 2023. If Vidazoo achieves all of its performance goals
through 2023, the total maximum consideration would be $93.5
million.
Outlook
Perion is raising guidance to account for the expected
contribution from the Vidazoo acquisition, which expected to be
earnings accretive immediately.
($M)
2021 Guidance
Prior
2021 Guidance
Revised
YoY
Growth %*
2022 Guidance
Prior
2022 Guidance
Revised
YoY
Growth %*
Revenue
$415-$430
$430-$445
33%
$490-$520
$545-$575
29%
Adjusted EBITDA
$50-$51
$52-$53
60%
$59-$62
$68-$72
33%
EBITDA to REV Ex-TAC
30%*
30%*
30%*
31%*
* At guidance midpoint
Conference call
Perion management will host a ZOOM conference call today at 8:30
a.m. ET to discuss the acquisition’s details and strategic fit.
Please join the call using the following Zoom link:
https://incommconferencing.zoom.us/webinar/register/WN_mipFyEiNRguVvDzDaoEDSg
You can also use the following dial-in numbers:
877-407-0626 or 201-689-7835
About Perion Network Ltd. Perion is a global technology
company that delivers strategic business solutions that enable
brands and advertisers to efficiently “Capture and Convince” users
across multiple platforms and channels, including interactive
connected television – or iCTV. Perion achieves this through its
Synchronized Digital Branding capabilities, which are focused on
high impact creative; content monetization; its branded search
network, in partnership with Microsoft Bing; and social media
management that orchestrates and optimizes paid advertising. This
diversification positions Perion for growth as budgets shift across
categories.
Non-GAAP Measures Adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization ("Adjusted EBITDA") is defined
as operating income excluding stock-based compensation expenses,
depreciation, acquisition related items consisting of amortization
of intangible assets and goodwill and intangible asset impairments,
acquisition related expenses, gains and losses recognized on
changes in the fair value of contingent consideration arrangements
and certain accounting entries under the business combination
accounting rules that require us to recognize a legal performance
obligation related to revenue arrangements of an acquired entity
based on its fair value at the date of acquisition. The purpose of
such adjustments is to give an indication of our performance
exclusive of non-cash charges and other items that are considered
by management to be outside of our core operating results. 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 our business.
However, our non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP
measures, and should be read only in conjunction with our
consolidated financial statements prepared in accordance with GAAP.
Additionally, these non-GAAP financial measures may differ
materially from the non-GAAP financial measures used by other
companies. Due to the high variability and difficulty in making
accurate forecasts and projections of some of the information
excluded from these projected measures, together with some of the
excluded information not being ascertainable or accessible, we are
unable to quantify certain amounts that would be required for such
presentation without unreasonable effort. Consequently, no
reconciliation of the forward-looking non-GAAP financial measures
is included. A reconciliation between GAAP and non-GAAP historical
financial measures are included in a Form 6-K furnished to the
Securities and Exchange Commission. A reconciliation between GAAP
and non-GAAP historical financial measures are included in a Form
6-K furnished to the Securities and Exchange Commission.
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” 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, among others, the failure to realize the anticipated
benefits of companies and businesses we acquired and may acquire in
the future, including Vidazoo, 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, 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, 2020 filed with the SEC on March 25, 2021. 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/20211003005061/en/
Perion Network Ltd. Rami Rozen, VP of Investor Relations +972
(52) 5694441 ramir@perion.com
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