Acquisition

RNS Number : 1828L

Taptica International Ltd

17 July 2017

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014

17 July 2017

Taptica International Ltd

("Taptica" or the "Company")

Taptica Acquires Majority Holding in Adinnovation Inc.

Taptica (AIM: TAP), a global end-to-end mobile advertising platform for advertising agencies and brands, is pleased to announce the acquisition of a majority shareholding in Adinnovation Inc. ("ADI"), a leader in Japan's mobile advertising industry, for up to $5.7m (the "Acquisition"). The Acquisition is being funded out of Taptica's own cash resources.

Rationale for the Deal

Following the establishment of Taptica's office in Seoul in 2016, and together with an already strong China-based presence, the Acquisition forms part of Taptica's stated strategy to increase its presence in the Asia-Pacific region. The management of Taptica anticipates Japan will be the next key growth market for mobile advertising due to its developed mobile networks and strong proliferation of smartphones.

The Acquisition will accelerate the raising of Taptica's brand awareness in Japan and facilitate its regional and global market expansion. The Acquisition follows the two companies working together under a partnership agreement, as announced earlier this year.

Taptica is focused on continued geographical expansion, establishing and growing its presence in ten hubs worldwide in the next three years (Russia, China, Germany, San Francisco, New York, Korea, Japan, India, South America and the UK).

Terms of the Transaction

In accordance with the terms of the binding agreement, Taptica has agreed to pay up to $5.7m for 57% of the issued share capital of ADI with approximately three-quarters payable immediately on closing and the remainder after 12 months based on ADI meeting certain targets. In addition, the Company has a call option to purchase the remaining 43% of the issued share capital of ADI for a price of 8x net profit and for a period of six months commencing three years after closing. Thereafter, ADI has a put option for a period of three months to sell at a price of 7x net profit.   

Following the closing of the Acquisition, which is expected in August 2017, Taptica expects ADI to contribute more than $5m to the Company's FY 2017 revenues and $0.5m to its adjusted EBITDA on a consolidated basis. A further announcement will be made in due course once the Acquisition has completed.

About Adinnovation Inc.

Established in 2010, ADI is a leader in Japan's mobile advertising industry. Headquartered in Japan, ADI specialises in mobile app and mobile advertising marketing promotion, implementation, management, tracking, and media site monetisation. ADI has recently begun expanding into China, Southeast Asia and several other markets.

Hagai Tal, Chief Executive Officer of Taptica, said: "We are delighted to welcome Adinnovation into the Taptica family. The two companies have been working closely together over the past year, generating revenues and profits together. The acquisition is expected to be accretive and earnings enhancing from day one and we also expect to benefit from a number of strategic synergies and mitigate the costs and risks we would have incurred to penetrate a market such as Japan organically. As a result, the Directors believe this transaction will be a key milestone in the continued international expansion of Taptica."

For further details:

Taptica [phone]  Hagai Tal, Chief Executive Officer  finnCap (Nomad and Joint Broker) [phone] Jonny Franklin-Adams, James Thompson - Corporate Finance Tim Redfern, Richard Chambers - Corporate Broking Berenberg (Joint Broker) [phone] Chris Bowman, Mark Whitmore Luther Pendragon (Financial PR adviser) 9100 7618 20 44+ Harry Chathli, Claire Norbury

About Taptica

Taptica is a global end-to-end mobile advertising platform that helps the world's top brands reach their most valuable users with the widest range of traffic sources available today, including social. Its proprietary technology leverages big data and, combined with state-of-the-art machine learning, enables quality media targeting at scale. Taptica creates a single arena in which brands can scale and engage more relevantly with mobile audiences, staying ahead of the competition. It works with more than 600 advertisers including Amazon, Disney, Facebook, Twitter, OpenTable, Expedia, Lyft and Zynga. Taptica is headquartered in Israel with offices in San Francisco, New York, Boston, Beijing, Seoul and London. Taptica is traded on the London Stock Exchange (AIM: TAP).

 

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