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Sizmek says its US$11.7 million acquisition of mobile demand-side platform (DSP) provider, StrikeAd, will see the company better address growing demand for programmatic advertising solutions through must-have mobile capabilities.
The US-based company announced the purchase last week and said StrikeAd’s mobile DSP capabilities will be combined with Sizmek’s programmatic assets under its MDX platform to build an end-to-end DSP. However, StrikeAd will remain separate from MDX.
The deal is based on a cash payment of $9.5 million along with the assumption of a $2.2 million note and is expected to close on 28 May. In its first quarter financial results, Sizmek said the transaction is expected to be accretive to adjusted EBITDA within 12 months, while full-year revenues are expected to increase to $10m post-acquisition to reach between $188m and $193m.
In a statement, Sizmek’s VP of global accounts in Asia-Pacific, Carolyn Bollaci, said the company’s growth strategy is to expand its suite of services in key growth areas of programmatic, mobile, video and data.
“The next wave of the DSP market will be led by mobile and our acquisition is aimed at ensuring brand advertisers can effectively target and communicate their ad creative to consumers on portable devices,” she said.
“The Australian consumer is now leading the world in mobile usage and brands are now increasing their budgets and wanting to make their mobile strategy work. The Strike Ad acquisition is part of our plan to help them accelerate their mobile advertising spend.”
StrikeAd was established in 2010 and will now sit alongside DSPs as part of Sizmek’s DSP Connect initiative to provide visibility and efficiency to agencies and brands using MDX, the company stated. StrikeAd is the second acquisition in a year after Sizmek purchased mobile tracking and retargeting group, Aerify Media, for US$6.25m last August.
“Mobile, a multi-device experience by its very nature, isn’t just another channel – it requires a radically different way of interacting with customers,” Sizmek’s CEO and president, Neil Nguyen, said.
“The addition of StrikeAd to Sizmek’s comprehensive mobile offering for marketers and agencies increases our addressable market and provides Sizmek with programmatic and mobile-specific expertise so we can accelerate these key areas of strategic focus for the company.”
Sizmek works with more than 3400 agencies, 17,000 brand advertisers, and 22,000 global Web publishers, and serve ads in more than 70 countries. The company reported first-quarter revenues of $39m for the first three months of 2015, up 2 per cent year-on-year, with adjusted EBITDA of $2.4m.
Notably, mobile formats revenues grew 103 per cent over the same period, the company stated.
StrikeAd CEO, Alex Rahaman, said his company will benefit from the global scale in sales, support, and services that Sizmek provides.
“By integrating StrikeAd into Sizmek MDX through DSP Connect, our mutual customers will benefit from workflow and data flow efficiencies that exist within the ad management platform. This is a win-win situation for Sizmek and StrikeAd customers,” he said.
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