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
IoT is at the core or many Digital Transformation initiatives with the goal of re-inventing a company's business model. We all agree that collecting relevant IoT data will result in massive amounts of data needing to be stored. However, with the rapid development of IoT devices and ongoing business model transformation, we are not able to predict the volume and growth of IoT data. And with the lack of IoT history, traditional methods of IT and infrastructure planning based on the past do not app...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus o...
"We're bringing out a new application monitoring system to the DevOps space. It manages large enterprise applications that are distributed throughout a node in many enterprises and we manage them as one collective," explained Kevin Barnes, President of eCube Systems, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
In his General Session at DevOps Summit, Asaf Yigal, Co-Founder & VP of Product at Logz.io, will explore the value of Kibana 4 for log analysis and will give a real live, hands-on tutorial on how to set up Kibana 4 and get the most out of Apache log files. He will examine three use cases: IT operations, business intelligence, and security and compliance. This is a hands-on session that will require participants to bring their own laptops, and we will provide the rest.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
A look across the tech landscape at the disruptive technologies that are increasing in prominence and speculate as to which will be most impactful for communications – namely, AI and Cloud Computing. In his session at 20th Cloud Expo, Curtis Peterson, VP of Operations at RingCentral, will highlight the current challenges of these transformative technologies and share strategies for preparing your organization for these changes. This “view from the top” will outline the latest trends and developm...
"LinearHub provides smart video conferencing, which is the Roundee service, and we archive all the video conferences and we also provide the transcript," stated Sunghyuk Kim, CEO of LinearHub, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
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...
"There's a growing demand from users for things to be faster. When you think about all the transactions or interactions users will have with your product and everything that is between those transactions and interactions - what drives us at Catchpoint Systems is the idea to measure that and to analyze it," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York Ci...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.