Global on-device mobile platform firm Digital Turbine has acquired AdColony for approximately US$400 million. CEO of AdColony's parent Otello, Lars Boilesen, said that Digital Turbine, with its "massive user base, extensive global relationships and distribution" will benefit from the acquisition.
"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," Boilesen said. According to him, AdColony witnessed a 15% year-on-year growth last year compared to 2019.
Some or all of the cash will be returned to Otello subject to the achievement of certain future net revenue targets - US$100 million in cash to be paid at closing, US$100 million in cash to be paid six months following the closing, and on-target earn-out of US$200 million, to be paid fully in cash, based on AdColony achieving certain future target net revenue objectives in 2021. The earn-out portion is not capped and is subject to change based on actual results. AdColony declined to comment on MARKETING-INTERACTIVE's concerning key personnel changes post-acquisition.
Digital Turbine's technology platform has been adopted by more than 40 mobile operators and OEMs worldwide, including [a-mo-bee], Everbadge, DeNA and Jam City and is said to have delivered more than three billion app preloads for tens of thousands of advertising campaigns. Its on-demand media platform touts "frictionless app and content discovery, user acquisition and engagement, operational efficiency, and monetisation opportunities". The company is headquartered in Austin, Texas with global offices in Singapore, Arlington, Durham, Mumbai, San Francisco, and Tel Aviv.
During the third quarter of last year (Q3 2020), Otello raked in US$63.2 million in revenue, an increase from about US$54 million in Q2 2020 but flat compared to the same period in 2019. AdColony's revenue grew from US$48.1 million in Q3 2019 to US$51.6 million in Q3 2020. According to its financial report, the growth in AdColony was offset by a decline in Bemobi from US$14.8 million in Q3 2019 to US$11.6 million in Q3 2020.
Both AdColony and Bemobi were impacted by COVID-19 but performed in line with Otello's expectations. AdColony was impacted by overall lower economic activity and businesses which have been interrupted and thus reduced their advertising spend. Meanwhile, Brazil is the biggest market for Bemobi and was hit particularly hard by COVID-19. However, Otello said it saw gradual improvement during Q3 2020.
Digital Turbine's CEO Bill Stone said the transaction will accelerate its growth and "is a positive" for its partners, advertisers, employees and shareholders. "The ability for Digital Turbine to utilise AdColony's unique mobile advertising solutions across our vast device distribution footprint unlocks significant new monetization opportunities for the combined company's platform offerings," Stone said.
He added that with the addition of AdColony, Digital Turbine will expand its collective experience, reach and suite of capabilities to benefit mobile advertisers and publishers worldwide.
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