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
"We have several customers now running private clouds. They're not as large as they should be but it's getting there. The adoption challenge has been pretty simple. Look at the world today of virtualization vs cloud," stated Nara Rajagopalan, CEO of Accelerite, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, will discuss recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model f...
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
As organizations shift towards IT-as-a-service models, the need for managing and protecting data residing across physical, virtual, and now cloud environments grows with it. Commvault can ensure protection, access and E-Discovery of your data – whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise. In his general session at 18th Cloud Expo, Randy De Meno, Chief Technologist - Windows Products and Microsoft Part...
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often ...
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Tintri VM-aware storage is the simplest for virtualized applications and cloud. Organizations including GE, Toyota, United Healthcare, NASA and 6 of the Fortune 15 have said “No to LUNs.” With Tintri they mana...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm ...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
Digitization is driving a fundamental change in society that is transforming the way businesses work with their customers, their supply chains and their people. Digital transformation leverages DevOps best practices, such as Agile Parallel Development, Continuous Delivery and Agile Operations to capitalize on opportunities and create competitive differentiation in the application economy. However, information security has been notably absent from the DevOps movement. Speed doesn’t have to negat...
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, will compare the Jevons Paradox to modern-day enterprise IT, e...
Your business relies on your applications and your employees to stay in business. Whether you develop apps or manage business critical apps that help fuel your business, what happens when users experience sluggish performance? You and all technical teams across the organization – application, network, operations, among others, as well as, those outside the organization, like ISPs and third-party providers – are called in to solve the problem.
SYS-CON Events announced today that Roundee / LinearHub will exhibit at the WebRTC Summit at @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LinearHub provides Roundee Service, a smart platform for enterprise video conferencing with enhanced features such as automatic recording and transcription service. Slack users can integrate Roundee to their team via Slack’s App Directory, and '/roundee' command lets your video conference ...