Welcome!

News Feed Item

XLMedia plc (“XLMedia” or “the Group”) Acquisition of a Social Gaming Marketing Company

XLMedia (AIM: XLM), a leading provider of digital performance marketing services, is pleased to announce the acquisition of ExciteAd Digital Marketing Ltd ("EDM"), a leading social and mobile gaming marketing company, for a consideration of up to US$19 million in cash and shares. The acquisition is expected to be immediately earnings enhancing and is highly complementary to XLMedia’s Media division.

EDM, which trades under the name "DAU-UP" (www.dauup.com), specialises in social and mobile advertising specifically targeted at ‘user acquisition’ for social gaming applications. EDM's principal geographical market is the US, in addition to other English and German speaking markets. EDM provides marketing services primarily to game developers in social and mobile platforms for either a performance based fee, such as CPI or cost per installation, or a management fee based on marketing spend.

EDM has an excellent track record of growth, reflecting the online expansion of the social and mobile gaming market. For the 12 months ended 30 June 2014, EDM delivered revenues of $12.8m and profit before tax, excluding share based payments, of $3.0m (Management accounts, Non GAAP). EDM was established in 2010, is based in Israel and employs 27 staff.

Social Gaming, which involves playing online games (such as Casino themed, strategy and adventure based) on social media or community sites, is experiencing significant increased demand across web, smartphones, and tablets platforms. According to market specialists Technavio, the demand for these games is expected to continue to see continued growth with an estimated CAGR of 24% in the US alone between 2012 and 2016. This strong growth is driven by the tremendous demand in the mobile and smartphone markets and the free availability of many of these games.

Strategic Rationale

The acquisition is in line with the Group’s strategy, as set out during its IPO in March 2014, to expand and diversify its activities into complementary areas and act as a consolidator in a fragmented market.

EDM is a highly complementary fit with XLMedia’s existing business, delivering a range of synergies and strategic benefits. The acquisition will diversify the business into new products and markets, targeting a new customer base, as well as providing enhanced growth opportunities within existing markets. In particular, benefits for the Group include:

  • Strong growth in a fast paced and expanding market – social and mobile games and applications are a fast expanding market which is not subject to the same regulatory regime as the online gambling market. EDM will provide the Group additional growth opportunities in this new area.
  • Social expertise – EDM's expertise in social and mobile marketing supplements XLMedia's knowledge and understanding in marketing online gambling.
  • Mobile expertise – approximately 50% of EDM’s revenues are generated through mobile users. Mobile users have also become a significant part of the online gambling industry, with an anticipated 44% share of the global interactive gambling market by 2018, according to market research provider H2 Gambling Capital (H2).
  • Revenue streams from regulated products and markets – social gaming, which does not involve real money gambling, does not require a licence. Expanding XLMedia's product range into this sector will therefore strengthen the Group's position in regulated online gambling markets such as the US and UK.
  • A new customer base – EDM’s customers typically comprise game developers in social platforms, presenting a new target audience for XLMedia.
  • An expanded geographic reach – EDM's principal market is the US, with additional revenues derived from other English and German speaking markets as well as other countries outside of XLMedia’s core Scandinavian markets, representing diversification for the Group into new geographies.
  • Strong analytic systems – EDM uses its proprietary internal systems for both analysis of performance as well as for campaign definitions and building. Integrating these tools into XLMedia's own network will contribute to the Group's performance and improvement.

Consideration and key terms

Under the terms of the share purchase agreement, the Group will acquire (on a debt free cash free basis) the entire issued share capital of EDM from its current shareholders which include Mr.Idan Nizri, the principal shareholder, founder and CEO, as well as other investors (the “Sellers”) for a total consideration of up to US$19 million (approximately £11.4 million). XLMedia will pay US$12 million in cash immediately and two additional payments of up to an aggregate US$7 million will be payable based on EDM’s EBITDA performance during the first and second years after 1 July 2014, 71% of which may (at XLMedia’s discretion) be satisfied by the issue of new ordinary shares in XLMedia(“XLMedia Shares”). The value of any new XLMedia Shares issued will be based on an agreed trailing average of the closing days trading price prior to election to issue the relevant shares. Each portion of any share consideration will be subject to an appropriate slow release arrangement. Mr. Nizri will remain with EDM for a minimum period of two years and shall be entitled to a seat on EDM's board of directors.

Commenting on the acquisition, Mr. Ory Weihs, CEO of XLMedia said,

“We are delighted to be announcing the acquisition of EDM, our largest transaction since listing in London. One of the main reasons behind our IPO was to enable the Group to act as a consolidator in highly fragmented markets. Since listing, we have been working hard to execute such deals and are therefore excited to conclude the acquisition of EDM, a global leader in the social and gaming marketing arena."

“EDM represents a highly complementary fit for our business, is immediately earnings enhancing, strengthens our reach in the US, delivers diversification into social gaming and extends our current gambling expertise and customer base. We look forward to working with the EDM team and to continue to execute our stated growth strategy.”

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
In his session at Cloud Expo, Alan Winters, an entertainment executive/TV producer turned serial entrepreneur, will present a success story of an entrepreneur who has both suffered through and benefited from offshore development across multiple businesses: The smart choice, or how to select the right offshore development partner Warning signs, or how to minimize chances of making the wrong choice Collaboration, or how to establish the most effective work processes Budget control, or how to max...
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...
China Unicom exhibit at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE FDD, TD-LTE), fixed-line broadband, ICT, data communica...
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
MongoDB Atlas leverages VPC peering for AWS, a service that allows multiple VPC networks to interact. This includes VPCs that belong to other AWS account holders. By performing cross account VPC peering, users ensure networks that host and communicate their data are secure. In his session at 20th Cloud Expo, Jay Gordon, a Developer Advocate at MongoDB, will explain how to properly architect your VPC using existing AWS tools and then peer with your MongoDB Atlas cluster. He'll discuss the secur...
Things are changing so quickly in IoT that it would take a wizard to predict which ecosystem will gain the most traction. In order for IoT to reach its potential, smart devices must be able to work together. Today, there are a slew of interoperability standards being promoted by big names to make this happen: HomeKit, Brillo and Alljoyn. In his session at @ThingsExpo, Adam Justice, vice president and general manager of Grid Connect, will review what happens when smart devices don’t work togethe...
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Deep learning has been very successful in social sciences and specially areas where there is a lot of data. Trading is another field that can be viewed as social science with a lot of data. With the advent of Deep Learning and Big Data technologies for efficient computation, we are finally able to use the same methods in investment management as we would in face recognition or in making chat-bots. In his session at 20th Cloud Expo, Gaurav Chakravorty, co-founder and Head of Strategy Development ...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
Imagine having the ability to leverage all of your current technology and to be able to compose it into one resource pool. Now imagine, as your business grows, not having to deploy a complete new appliance to scale your infrastructure. Also imagine a true multi-cloud capability that allows live migration without any modification between cloud environments regardless of whether that cloud is your private cloud or your public AWS, Azure or Google instance. Now think of a world that is not locked i...
Technology innovation is the driving force behind modern business and enterprises must respond by increasing the speed and efficiency of software delivery. The challenge is that existing enterprise applications are expensive to develop and difficult to modernize. This often results in what Gartner calls "Bimodal IT," where business struggle to apply modern tools and practices to traditional monolithic applications. But these existing assets can be modernized and made more efficient without havin...
Most companies are adopting or evaluating container technology - Docker in particular - to speed up application deployment, drive down cost, ease management and make application delivery more flexible overall. As with most new architectures, this dream takes a lot of work to become a reality. Even when you do get your application componentized enough and packaged properly, there are still challenges for DevOps teams to making the shift to continuous delivery and achieving that reduction in cost...